Document and Entity Information
Document and Entity Information Document - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 03, 2017 | |
Document Information [Line Items] | ||
Entity Registrant Name | Radian Group Inc. | |
Entity Central Index Key | 890,926 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 215,565,249 | |
Entity Well-known Seasoned Issuer | Yes | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) Statement - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | |
ASSETS | |||
Fixed-maturities available for sale—at fair value (amortized cost $3,218,614 and $2,856,468) | $ 3,256,581 | $ 2,838,512 | |
Equity securities available for sale—at fair value (cost $161,159 and $1,330) | 161,303 | 1,330 | |
Trading Securities—at fair value | 636,225 | 879,862 | |
Short-term investments—at fair value (includes $36,782 and $0 of reinvested cash collateral held under securities lending agreements) | 491,956 | 741,531 | |
Other invested assets | 599 | 1,195 | |
Total investments | 4,546,664 | 4,462,430 | |
Cash | 61,917 | 52,149 | |
Restricted cash | 36,888 | 9,665 | |
Accounts and notes receivable | 97,020 | 77,631 | |
Property, Plant and Equipment, Net | [1],[2] | 88,119 | 70,665 |
Deferred income taxes, net (Note 9) | 356,181 | 411,798 | |
Goodwill and other intangible assets, net (Note 6) | 66,967 | 276,228 | |
Prepaid reinsurance premium | 239,620 | 229,438 | |
Other assets (Note 8) | 439,016 | 343,835 | |
Total assets | 5,844,273 | 5,863,174 | |
Liabilities and Stockholders’ Equity | |||
Unearned premiums | 717,589 | 681,222 | |
Reserve for losses and loss adjustment expense (“LAE”) (Note 10) | 556,488 | 760,269 | |
Long-term debt (Note 11) | 1,026,806 | 1,069,537 | |
Reinsurance funds withheld | 194,353 | 158,001 | |
Other liabilities | 360,835 | 321,859 | |
Total liabilities | 2,856,071 | 2,990,888 | |
Commitments and contingencies (Note 12) | |||
Stockholders’ equity | |||
Common stock: par value $.001 per share; 485,000,000 shares authorized at September 30, 2017 and December 31, 2016; 232,894,636 and 232,091,921 shares issued at September 30, 2017 and December 31, 2016, respectively; 215,298,551 and 214,521,079 shares outstanding at September 30, 2017 and December 31, 2016, respectively | 233 | 232 | |
Treasury stock, at cost: 17,596,085 and 17,570,842 shares at September 30, 2017 and December 31, 2016, respectively | (893,754) | (893,332) | |
Additional paid-in capital | 2,747,393 | 2,779,891 | |
Retained earnings | 1,110,057 | 997,890 | |
Accumulated other comprehensive income (loss) (“AOCI”) (Note 14) | 24,273 | (12,395) | |
Total stockholders’ equity | 2,988,202 | 2,872,286 | |
Total liabilities and stockholders’ equity | 5,844,273 | 5,863,174 | |
Deferred policy acquisition costs | 15,816 | 14,127 | |
Accrued Investment Income Receivable | $ 31,390 | $ 29,255 | |
[1] | Includes $45.0 million and $49.7 million at September 30, 2017 and December 31, 2016, respectively, related to our technology upgrade project and $15.7 million at September 30, 2017 of leasehold improvements related to our new corporate headquarters. | ||
[2] | Property and equipment at cost, less accumulated depreciation of $101.7 million and $118.5 million at September 30, 2017 and December 31, 2016, respectively. Depreciation expense was $4.6 million and $2.9 million for the three-month periods ended September 30, 2017 and 2016, respectively, and $12.8 million and $7.6 million for the nine-month periods ended September 30, 2017 and 2016, respectively. |
Balance Sheet Parenthetical (Pa
Balance Sheet Parenthetical (Parentheticals) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Available-for-sale Debt Securities, Amortized Cost Basis | $ 3,218,614 | $ 2,856,468 |
Available-for-sale Equity Securities, Amortized Cost Basis | 161,159 | 1,330 |
Cash Collateral for Borrowed Securities | $ 36,782 | $ 0 |
Common Stock, Number of Shares, Par Value and Other Disclosures [Abstract] | ||
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 485,000,000 | 485,000,000 |
Common Stock, Shares, Issued | 232,894,636 | 232,091,921 |
Common Stock, Shares, Outstanding | 215,298,551 | 214,521,079 |
Treasury Stock, Shares | 17,596,085 | 17,570,842 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenues: | ||||
Net premiums earned—insurance | $ 236,702 | $ 238,149 | $ 687,598 | $ 688,184 |
Services revenue | 39,571 | 45,877 | 115,400 | 118,989 |
Net investment income | 32,540 | 28,430 | 93,643 | 84,470 |
Net gains (losses) on investments and other financial instruments | 2,480 | 7,711 | 4,960 | 69,524 |
Other income | 760 | 716 | 2,118 | 2,836 |
Total revenues | 312,053 | 320,883 | 903,719 | 964,003 |
Expenses: | ||||
Provision for losses | 35,841 | 55,785 | 99,976 | 148,501 |
Policy acquisition costs | 5,554 | 6,119 | 18,406 | 17,901 |
Cost of services | 27,240 | 29,447 | 81,250 | 80,362 |
Other operating expenses | 64,195 | 62,119 | 201,322 | 182,480 |
Restructuring and other exit costs (Note 1) | 12,038 | 0 | 12,038 | 0 |
Interest expense | 15,715 | 19,783 | 47,832 | 63,863 |
Loss on induced conversion and debt extinguishment (Note 11) | 45,766 | 17,397 | 51,469 | 75,075 |
Impairment of goodwill (Note 6) | 0 | 0 | 184,374 | 0 |
Amortization and impairment of other intangible assets | 2,890 | 3,292 | 25,042 | 9,931 |
Total expenses | 209,239 | 193,942 | 721,709 | 578,113 |
Pretax income | 102,814 | 126,941 | 182,010 | 385,890 |
Income tax provision | 37,672 | 44,138 | 67,738 | 138,726 |
Net income | $ 65,142 | $ 82,803 | $ 114,272 | $ 247,164 |
Earnings Per Share, Basic [Abstract] | ||||
Basic net income (loss) per share | $ 0.30 | $ 0.39 | $ 0.53 | $ 1.17 |
Earnings Per Share, Diluted [Abstract] | ||||
Diluted net income (loss) per share | $ 0.30 | $ 0.37 | $ 0.52 | $ 1.09 |
Weighted-average number of common shares outstanding—basic | 215,279 | 214,387 | 215,194 | 210,858 |
Weighted-average number of common and common equivalent shares outstanding—diluted | 219,391 | 225,968 | 220,230 | 230,672 |
Dividends per share | $ 0.0025 | $ 0.0025 | $ 0.0075 | $ 0.0075 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Net income | $ 65,142 | $ 82,803 | $ 114,272 | $ 247,164 |
Unrealized holding gains (losses) arising during the period | ||||
Unrealized holding gains (losses) arising during the period | 6,239 | 6,943 | 33,845 | 86,614 |
Less: Reclassification adjustment for net gains (losses) included in net income (loss) | 111 | 3,695 | (2,687) | 2,296 |
Net unrealized gains (losses) on investments | 6,128 | 3,248 | 36,532 | 84,318 |
Net foreign currency translation adjustments | 28 | (36) | 136 | (346) |
Net actuarial gains (losses) | 0 | 156 | 0 | (22) |
Other comprehensive income, net of tax | 6,156 | 3,368 | 36,668 | 83,950 |
Foreign currency translation adjustments: | ||||
Comprehensive income | $ 71,298 | $ 86,171 | $ 150,940 | $ 331,114 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Changes in Common Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Parent | Common Stock | Treasury Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income |
Balance, beginning of period at Dec. 31, 2015 | $ 224 | $ (893,176) | $ 2,716,618 | $ 691,742 | $ (18,477) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Impact to common stock related to extinguishment of Convertible Senior Notes | 17 | ||||||
Issuance of common stock under incentive and benefit plans | 0 | ||||||
Stock Repurchased and Retired During Period, Value | (9) | (100,179) | |||||
Share-based compensation | 17,632 | ||||||
Issuance of common stock under incentive and benefit plans | 1,711 | ||||||
Impact of extinguishment of Convertible Senior Notes due 2017 and 2019 (Note 11) | 143,078 | ||||||
Equity Impact of Termination of Capped Call Transaction | 0 | ||||||
Repurchases of common stock under incentive plans | (21) | ||||||
Net income | $ 247,164 | 247,164 | |||||
Dividends declared | (1,568) | ||||||
Net foreign currency translation adjustment, net of tax | (346) | (346) | |||||
Net unrealized gains (losses) on investments, net of tax | 84,318 | 84,318 | |||||
Net actuarial gains (losses) | (22) | (22) | |||||
Balance, end of period at Sep. 30, 2016 | $ 2,888,706 | 232 | (893,197) | 2,778,860 | 937,338 | 65,473 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Cumulative effect of adoption of the accounting standard update for share-based payment transactions | 0 | 0 | |||||
Balance, beginning of period at Dec. 31, 2016 | 2,872,286 | 232 | (893,332) | 2,779,891 | 997,890 | (12,395) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Impact to common stock related to extinguishment of Convertible Senior Notes | 0 | ||||||
Issuance of common stock under incentive and benefit plans | 1 | ||||||
Stock Repurchased and Retired During Period, Value | 0 | (6) | |||||
Share-based compensation | 10,290 | ||||||
Issuance of common stock under incentive and benefit plans | 4,761 | ||||||
Impact of extinguishment of Convertible Senior Notes due 2017 and 2019 (Note 11) | (52,408) | ||||||
Equity Impact of Termination of Capped Call Transaction | 4,109 | ||||||
Repurchases of common stock under incentive plans | (422) | ||||||
Net income | 114,272 | 114,272 | |||||
Dividends declared | (1,614) | ||||||
Net foreign currency translation adjustment, net of tax | 136 | 136 | |||||
Net unrealized gains (losses) on investments, net of tax | 36,532 | 36,532 | |||||
Net actuarial gains (losses) | 0 | 0 | |||||
Balance, end of period at Sep. 30, 2017 | $ 2,988,202 | $ 2,988,202 | $ 233 | $ (893,754) | 2,747,393 | 1,110,057 | $ 24,273 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Cumulative effect of adoption of the accounting standard update for share-based payment transactions | $ 756 | $ (491) |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Net Cash Provided by (Used in) Operating Activities [Abstract] | ||
Net Cash Provided by (Used in) Operating Activities | $ 218,425 | $ 287,449 |
Cash flows from investing activities: | ||
Proceeds from Sale and Maturity of Fixed-Maturity Investments Available-for-sale | 737,054 | 537,679 |
Proceeds from Sale of Available-for-sale Securities, Equity | 23,423 | 74,868 |
Proceeds from Sale of Trading Securities Held-for-investment | 176,448 | 178,227 |
Proceeds from Redemption of Fixed-Maturity Investments Available-for-sale | 377,219 | 220,126 |
Proceeds from Redemption of Trading Securities Held-for-investment | 70,161 | 106,589 |
Purchases of Fixed-Maturity Investments Available-for-sale | (1,491,083) | (1,419,431) |
Equity securities available for sale | (195,297) | (830) |
Sales, Redemptions and (Purchases) of Short-term Investments | 251,509 | 241,579 |
Sales, Redemptions and (Purchases) of Other assets and other invested assets, net | 596 | 2,390 |
Purchases of property and equipment, net | (25,173) | (28,252) |
Acquisitions, net of cash acquired | (86) | 0 |
Net cash provided by (used in) investing activities | (75,229) | (87,055) |
Cash flows from financing activities: | ||
Dividends paid | (1,614) | (1,568) |
Issuance of long-term debt, net | 443,250 | 343,417 |
Purchases and redemptions of long-term debt | (591,918) | (445,069) |
Proceeds from termination of capped calls | 4,109 | 0 |
Issuance of common stock | 3,283 | 343 |
Purchase of common shares | (6) | (100,188) |
Change in payable under securities lending program | 36,782 | 0 |
Excess tax benefits from share-based awards (Note 1) | 0 | 115 |
Repayment of other borrowings | (207) | (292) |
Net cash provided by (used in) financing activities | (106,321) | (203,242) |
Effect of exchange rate changes on cash and restricted cash | 116 | (382) |
Increase (decrease) in cash and restricted cash | 36,991 | (3,230) |
Cash and restricted cash, beginning of period | 61,814 | 59,898 |
Cash and restricted cash, end of period | $ 98,805 | $ 56,668 |
Note 1 - Condensed Consolidated
Note 1 - Condensed Consolidated Financial Statements - Business Overview and Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Text Block] | Condensed Consolidated Financial Statements—Business Overview and Significant Accounting Policies Business Overview We provide mortgage insurance on first-lien mortgage loans, and products and services to the real estate and mortgage finance industries through our two business segments—Mortgage Insurance and Services. Mortgage Insurance Our Mortgage Insurance segment provides credit-related insurance coverage, principally through private mortgage insurance, to mortgage lending institutions nationwide. Private mortgage insurance plays an important role in the U.S. housing finance system because it helps protect mortgage lenders and third-party beneficiaries by mitigating default-related losses on residential mortgage loans. Generally, these loans are made to home buyers who make down payments of less than 20% of the home’s purchase price or, in the case of refinancings, have less than 20% equity in the home. Private mortgage insurance also facilitates the sale of these low down payment loans in the secondary mortgage market, most of which are sold to the GSEs. Our Mortgage Insurance segment currently offers primary mortgage insurance coverage on residential first-lien mortgage loans, which comprised 98.2% of our $51.2 billion total direct RIF as of September 30, 2017 . At September 30, 2017 , Pool Insurance represented 1.6% of our total direct RIF. We provide our mortgage insurance products mainly through our wholly-owned subsidiary, Radian Guaranty. The GSEs and state insurance regulators impose various capital and financial requirements on our insurance subsidiaries. These include Risk-to-capital, other risk-based capital measures and surplus requirements, as well as the PMIERs financial requirements. Failure to comply with these capital and financial requirements could limit the amount of insurance that our insurance subsidiaries may write. The GSEs and state insurance regulators also possess significant discretion with respect to our insurance subsidiaries and their business. See Note 15 for additional regulatory information. Private mortgage insurers, including Radian Guaranty, are required to comply with the PMIERs to remain eligible insurers of loans purchased by the GSEs. At September 30, 2017 , Radian Guaranty is an approved mortgage insurer under the PMIERs and is in compliance with the PMIERs financial requirements. The PMIERs are comprehensive, covering virtually all aspects of a private mortgage insurer’s business and operations, including internal risk management and quality controls, the relationship between the GSEs and the approved insurer as well as the approved insurer’s financial condition. The GSEs have a broad range of consent rights to approve various actions of the approved insurer. If Radian Guaranty is unable to satisfy the requirements set forth in the PMIERs, the GSEs could restrict it from conducting certain types of business with them or take actions that may include not purchasing loans insured by Radian Guaranty. See Note 1 of Notes to Consolidated Financial Statements in our 2016 Form 10-K for additional information about the PMIERs. The PMIERs specifically provide that the factors that are applied to determine a mortgage insurer’s Minimum Required Assets may be updated every two years. The GSEs have informed us that they expect updates to the PMIERs will become effective in the fourth quarter of 2018. Based on this timing, we would expect to receive a draft of the recommended changes later this year and then to engage in an iterative review process with the GSEs and FHFA before the updated PMIERs are finalized. The GSEs will provide approved insurers with an implementation period of at least 180 days after the updated requirements are finalized and prior to their effective date. While we have not received a draft of the changes to the PMIERs to date, it is reasonably possible that updates to the PMIERs could, among other things, result in a material increase to Radian Guaranty’s capital requirements under the PMIERs financial requirements. Services Our Services segment provides services and solutions to participants in multiple facets of the residential real estate and mortgage finance markets. Our Services business is a fee-for-service business that provides outsourced services to buyers and sellers of, and investors in, mortgage- and real estate-related loans and securities as well as other consumer ABS. 2017 Developments Capital and Liquidity Actions. During the third quarter of 2017, we completed the following transactions: • the issuance of $450 million aggregate principal amount of Senior Notes due 2024; and • tender offers resulting in the purchases of aggregate principal amounts of $141.4 million , $115.9 million and $152.3 million of our Senior Notes due 2019, 2020 and 2021, respectively. The purchases of Senior Notes due 2019, 2020 and 2021 resulted in a pretax charge of $45.8 million during the third quarter of 2017, recorded as a loss on induced conversion and debt extinguishment. See Note 11 for additional information. On August 9, 2017, Radian Group’s board of directors renewed its share repurchase program that enables the Company to repurchase its common stock. The current authorization allows the Company to spend up to $50 million to repurchase Radian Group common stock in the open market or in privately negotiated transactions, based on market and business conditions, stock price and other factors. See Note 13 for additional information. During the second quarter of 2017, we purchased an aggregate principal amount of $21.6 million of our outstanding Convertible Senior Notes due 2017. These purchases of Convertible Senior Notes due 2017 resulted in a loss on induced conversion and debt extinguishment of $1.2 million . On January 27, 2017, we settled our obligations with respect to the remaining $68.0 million aggregate principal amount of our Convertible Senior Notes due 2019, resulting in a loss on induced conversion and debt extinguishment of $4.5 million . As of the settlement date, this transaction resulted in an aggregate decrease of 6.4 million diluted shares for purposes of determining diluted net income per share. See Note 11 for additional information on our transactions related to long-term debt. Restructuring and Other Exit Costs. Based on our strategic assessment of the Services business, on September 5, 2017, the Company committed to a plan to restructure the Services business and incurred pretax restructuring charges of $12.0 million in the third quarter of 2017, including $5.4 million in cash payments. Additional pretax charges of approximately $7.5 million , including approximately $6.0 million in cash payments, are expected to be recognized within the next 12 months. The total restructuring charges of approximately $19.5 million are expected to consist of: (i) asset impairment charges of approximately $8.1 million ; (ii) employee severance and benefit costs of approximately $6.9 million ; (iii) facility and lease termination costs of approximately $2.7 million ; and (iv) contract termination and other restructuring costs of approximately $1.8 million . See Note 6 for additional information, including the events that led to the restructuring decision. Impairment of Goodwill and Other Intangible Assets. During the second quarter of 2017, we recorded a goodwill impairment charge of $184.4 million , as well as an impairment charge for other intangible assets of $15.8 million , in each case related to our Services segment. These charges were primarily due to changes in expectations regarding the future growth of certain Services product lines resulting from changes in our business strategy, combined with market trends observed during the second quarter of 2017 that we expect to persist. As of September 30, 2017 the remaining balances of goodwill and other intangible assets reported in our condensed consolidated balance sheet were $10.9 million and $56.0 million , respectively. See Note 6 for additional information. Developments Subsequent to September 30, 2017. For information on transactions that occurred subsequent to September 30, 2017 , see Note 16 . Significant Accounting Policies Basis of Presentation Our condensed consolidated financial statements include the accounts of Radian Group Inc. and its subsidiaries. We refer to Radian Group Inc. together with its consolidated subsidiaries as “Radian,” the “Company,” “we,” “us” or “our,” unless the context requires otherwise. We generally refer to Radian Group Inc. alone, without its consolidated subsidiaries, as “Radian Group.” Unless otherwise defined in this report, certain terms and acronyms used throughout this report are defined in the Glossary of Abbreviations and Acronyms included as part of this report. Our condensed consolidated financial statements are prepared in accordance with GAAP and include the accounts of all wholly-owned subsidiaries. All intercompany accounts and transactions, and intercompany profits and losses, have been eliminated. We have condensed or omitted certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with GAAP pursuant to the instructions set forth in Article 10 of Regulation S-X of the SEC. The financial information presented for interim periods is unaudited; however, such information reflects all adjustments that are, in the opinion of management, necessary for the fair statement of the financial position, results of operations, comprehensive income and cash flows for the interim periods presented. Such adjustments are of a normal recurring nature. The year-end condensed balance sheet data was derived from our audited financial statements, but does not include all disclosures required by GAAP. These interim financial statements should be read in conjunction with the audited financial statements and notes thereto included in our 2016 Form 10-K. The results of operations for interim periods are not necessarily indicative of results to be expected for the full year or for any other period. Certain prior period amounts have been reclassified to conform to current period presentation. Use of Estimates The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of our contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. While the amounts included in our condensed consolidated financial statements include our best estimates and assumptions, actual results may vary materially. Other Significant Accounting Policies See Note 2 of Notes to Consolidated Financial Statements in our 2016 Form 10-K for information regarding other significant accounting policies. There have been no significant changes in our significant accounting policies from those discussed in our 2016 Form 10-K, other than described below. Securities Lending Agreements. Securities lending agreements, in which we loan certain securities in our investment portfolio to third parties for short periods of time, are treated as collateralized financing arrangements on our condensed consolidated balance sheets. In all of our securities lending agreements, the securities that we transfer to Borrowers (loaned securities) may be transferred or loaned by the Borrowers; however, we maintain effective control over all loaned securities, including: (i) retaining ownership of the securities; (ii) receiving the related investment or other income; and (iii) having the right to request the return of the loaned securities at any time. We report such securities within other assets in our condensed consolidated balance sheets. We receive cash or other securities as collateral for such loaned securities. Any cash collateral may be invested in liquid assets. Cash collateral, which is reinvested for our benefit by the intermediary in accordance with the investment guidelines contained in the securities lending and collateral agreements, is reflected in short-term investments, with an offsetting liability recognized in other liabilities for the obligation to return the cash collateral to the Borrower. Securities collateral we receive from Borrowers is held on deposit for the Borrower’s benefit and we may not transfer or loan such securities collateral unless the Borrower is in default. Therefore, such securities collateral is not reflected in our condensed consolidated financial statements given that the risks and rewards of ownership are not transferred to us from the Borrowers. See Note 5 for additional information. Fees received and paid in connection with securities lending agreements are recorded in net investment income and interest expense, respectively, on the condensed consolidated statements of operations. Restructuring and Other Exit Cos ts. Restructuring and other exit costs include items such as asset impairment charges, employee severance and benefit costs, facility and lease termination costs, contract terminations and other costs of restructuring or exiting activities. The timing of the future expense and associated cash payments for restructuring and other exit costs is dependent on the type of exit cost and is expected to be completed within the next 12 months. We review assets for impairment in accordance with the accounting guidance for long-lived assets. Generally, our employee severance and benefit costs are part of the Company’s ongoing benefit arrangement and are recognized when probable and estimable. A liability for facility and lease contract termination costs is recognized at the date we cease the use of rights conveyed by the contract and is measured at its fair value, which is determined based on the remaining contractual lease rentals reduced by estimated sublease rentals. Other contract termination and exit costs include future costs that will be incurred, which are recognized in total when they no longer will benefit the Company. The liabilities for restructuring and other exit costs are recorded in other liabilities. Goodwill and Other Intangible Assets, Net. In performing the quantitative analysis for our goodwill impairment test as of June 30, 2017, we elected to early adopt the update to the accounting standard regarding goodwill and other intangibles, as discussed in “— Accounting Standards Adopted During 2017 ” below. This update simplifies the subsequent measurement of goodwill by eliminating step two of the goodwill impairment test. Under the new guidance, if indicators for impairment are present, we perform a quantitative analysis to evaluate our long-lived assets for potential impairment, and then determine the amount of the goodwill impairment by comparing a reporting unit’s fair value to its carrying amount. After adjusting the carrying value for any impairment of other intangibles or long-lived assets, an impairment charge is recognized for any excess of the reporting unit’s carrying amount over the reporting unit’s estimated fair value, up to the full amount of the goodwill allocated to the reporting unit. Other than the change to adopt the update to the accounting standard that eliminates step two of the goodwill impairment test, as described above, our accounting policy with regard to goodwill and other intangible assets has remained unchanged from that described in Notes 2 and 7 of Notes to Consolidated Financial Statements in our 2016 Form 10-K. Recent Accounting Pronouncements Accounting Standards Adopted During 2017. In March 2016, the FASB issued an update to the accounting standards for share-based payment transactions, including: (i) accounting for income taxes; (ii) classification of excess tax benefits on the statement of cash flows; (iii) forfeitures; (iv) minimum statutory tax withholding requirements; (v) classification of employee taxes paid on the statement of cash flows when an employer withholds shares for tax withholding purposes; (vi) the practical expedient for estimating the expected term; and (vii) intrinsic value. Among other things, the update requires: (i) all excess tax benefits and tax deficiencies to be recognized as income tax expense or benefit in the income statement as they occur; (ii) recognition of excess tax benefits, regardless of whether the benefits reduce taxes payable in the current period; and (iii) excess tax benefits to be classified along with other cash flows as an operating activity, rather than separated from other income tax cash flows as a financing activity. This update is effective for public companies for fiscal years beginning after December 15, 2016. Our adoption of this update, effective January 1, 2017, had an immaterial impact on our financial statements at implementation. As a result of implementing this new standard, however, we expect the potential for limited increased volatility in our effective tax rate and net earnings, and possible additional dilution in earnings per share calculations. In January 2017, the FASB issued an update to the accounting standard regarding goodwill and other intangibles. This update simplifies the subsequent measurement of goodwill by eliminating step two of the goodwill impairment test. Instead, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and recognize an impairment charge for any excess of the reporting unit’s carrying amount over the reporting unit’s estimated fair value, after adjusting the carrying value for any impairment of other intangibles or long-lived assets. The provisions of this update are effective for interim and annual goodwill impairment tests in fiscal years beginning after December 15, 2019, with early adoption permitted for interim or annual goodwill impairment tests performed after January 1, 2017. We elected to early adopt this update to perform the quantitative analysis for our goodwill impairment test as of June 30, 2017. See “— Other Significant Accounting Policies ” above and Note 6 for additional information. Accounting Standards Not Yet Adopted. In May 2014, the FASB issued an update to the accounting standard regarding revenue recognition. In accordance with the new standard, recognition of revenue occurs when a customer obtains control of promised goods or services, in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the new standard requires that reporting companies disclose the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. This update is not expected to change revenue recognition principles related to our investments and insurance products, which combined represent a significant portion of our total revenues. This update is primarily applicable to revenues from our Services segment. In July 2015, the FASB delayed the effective date for this updated standard for public companies to interim and annual periods beginning after December 15, 2017, and subsequently issued various clarifying updates. Early adoption is permitted. This standard permits the use of either the full retrospective or the modified retrospective transition method. We currently anticipate using the modified retrospective method of adoption, with the cumulative effect of initially applying the guidance recognized at the date of adoption. We have reviewed current accounting policies and key contracts that are representative of our various products and services within the Services segment and are in the process of comparing our historical accounting policies and practices to the requirements of the new guidance. We are identifying potential differences resulting from applying the new requirements to our contracts and updating our accounting policy. While we anticipate differences in timing of revenue recognition, we do not expect the impact to be material to our financial statements. We are also in the process of evaluating new disclosure requirements and identifying appropriate changes to our business processes, systems and controls to support recognition and disclosure under the new guidance. In January 2016, the FASB issued an update that makes certain changes to the standard for the accounting of financial instruments. Among other things, the update requires: (i) equity investments to be measured at fair value with changes in fair value recognized in net income (loss); (ii) the use of the exit price notion when measuring the fair value of financial instruments for disclosure purposes; (iii) separate presentation of financial assets and financial liabilities by measurement category and form of financial asset; and (iv) separate presentation in other comprehensive income of the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk (also referred to as “own credit”) when the organization has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. The update also eliminates the requirement to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet. This update is effective for public companies for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is not permitted, with the exception of the “own credit” provision. We are currently evaluating the impact to our financial statements and future disclosures as a result of this update. In February 2016, the FASB issued an update that replaces the existing accounting and disclosure requirements for leases of property, plant and equipment. The update requires lessees to recognize, as of the lease commencement date, assets and liabilities for all leases with lease terms of more than 12 months, which is a change from the current GAAP requirement to recognize only capital leases on the balance sheet. Pursuant to the new standard, the liability initially recognized for the lease obligation is equal to the present value of the lease payments not yet made, discounted over the lease term at the implicit interest rate of the lease, if available, or otherwise at the lessee’s incremental borrowing rate. The lessee is also required to recognize an asset for its right to use the underlying asset for the lease term, based on the liability subject to certain adjustments, such as for initial direct costs. Leases are required to be classified as either operating or finance, with expense on operating leases recorded as a single lease cost on a straight-line basis. For finance leases, interest expense on the lease liability is required to be recognized separately from the straight-line amortization of the right-of-use asset. Quantitative disclosures are required for certain items, including the cost of leases, the weighted-average remaining lease term, the weighted-average discount rate and a maturity analysis of lease liabilities. Additional qualitative disclosures are also required regarding the nature of the leases, such as basis, terms and conditions of: (i) variable interest payments; (ii) extension and termination options; and (iii) residual value guarantees. This update is effective for public companies for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. The new standard must be adopted by applying the new guidance as of the beginning of the earliest comparative period presented, using a modified retrospective transition approach with certain optional practical expedients. We are currently evaluating the impact to our financial statements and future disclosures as a result of this update. In June 2016, the FASB issued an update to the accounting standard regarding the measurement of credit losses on financial instruments. This update requires that financial assets measured at their amortized cost basis be presented at the net amount expected to be collected. Credit losses relating to available-for-sale debt securities are to be recorded through an allowance for credit losses, rather than a write-down of the asset, with the amount of the allowance limited to the amount by which fair value is less than amortized cost. This update is effective for public companies for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. We are currently evaluating the impact to our financial statements and future disclosures as a result of this update. In October 2016, the FASB issued an update to the accounting standard regarding the accounting for income taxes. This update requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. This update will be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. This update is effective for public companies for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted, including adoption in the first interim period of the adoption year. We have concluded there is currently no impact to our financial statements and future disclosures as a result of this update. In March 2017, the FASB issued an update to the accounting standard regarding receivables. The new standard requires certain premiums on purchased callable debt securities to be amortized to the earliest call date. The amortization period for callable debt securities purchased at a discount will not be impacted. The provisions of this update are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. We are currently evaluating the impact to our financial statements and future disclosures as a result of this update. |
Note 2 - Net Income Per Share
Note 2 - Net Income Per Share | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | Net Income Per Share Basic net income per share is computed by dividing net income by the weighted-average number of common shares outstanding, while diluted net income per share is computed by dividing net income attributable to common shareholders by the sum of the weighted-average number of common shares outstanding and the weighted-average number of dilutive potential common shares. Dilutive potential common shares relate to our share-based compensation arrangements and our outstanding convertible senior notes. The calculation of basic and diluted net income per share was as follows: Three Months Ended Nine Months Ended (In thousands, except per-share amounts) 2017 2016 2017 2016 Net income—basic $ 65,142 $ 82,803 $ 114,272 $ 247,164 Adjustment for dilutive Convertible Senior Notes due 2019, net of tax (1) — 848 (215 ) 5,151 Net income—diluted $ 65,142 $ 83,651 $ 114,057 $ 252,315 Average common shares outstanding—basic 215,279 214,387 215,194 210,858 Dilutive effect of Convertible Senior Notes due 2017 (2) 16 178 398 71 Dilutive effect of Convertible Senior Notes due 2019 — 8,274 611 16,897 Dilutive effect of share-based compensation arrangements (2) 4,096 3,129 4,027 2,846 Adjusted average common shares outstanding—diluted 219,391 225,968 220,230 230,672 Net income per share: Basic $ 0.30 $ 0.39 $ 0.53 $ 1.17 Diluted $ 0.30 $ 0.37 $ 0.52 $ 1.09 ______________________ (1) As applicable, includes coupon interest, amortization of discount and fees, and other changes in income that would result from the assumed conversion. Included in the nine months ended September 30, 2017 is a benefit related to our adjustment of estimated accrued expense to actual amounts, resulting from the January 2017 settlement of our obligations on the remaining Convertible Senior Notes due 2019. (2) The following number of shares of our common stock equivalents issued under our share-based compensation arrangements and our convertible debt were not included in the calculation of diluted net income per share because they were anti-dilutive: Three Months Ended Nine Months Ended (In thousands) 2017 2016 2017 2016 Shares of common stock equivalents 676 1,045 440 1,045 Shares of Convertible Senior Notes due 2017 — — — 1,902 |
Note 3 - Segment Reporting
Note 3 - Segment Reporting | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting We have two strategic business units that we manage separately—Mortgage Insurance and Services. Adjusted pretax operating income (loss) for each segment represents segment results on a standalone basis; therefore, inter-segment eliminations and reclassifications required for consolidated GAAP presentation have not been reflected. In the fourth quarter of 2016, we completed an organizational change that resulted in a change to our segment financial reporting structure. Previously, contract underwriting activities on behalf of third parties were reported in either the Mortgage Insurance segment or the Services segment, based on the customer relationship. Management responsibility for this contract underwriting business was moved entirely to the Services segment. This organizational change resulted in the reclassification to the Services segment of revenue and expenses for all contract underwriting performed on behalf of third parties. This change aligns with changes in personnel reporting lines and management oversight, and is consistent with the way the chief operating decision maker began assessing the performance of the reportable segments in the fourth quarter of 2016. The amounts reclassified did not have a material impact on adjusted pretax operating income. As a result, on a segment basis, Services revenue, cost of services and other operating expenses have increased, with offsetting reductions in Mortgage Insurance other income and other operating expenses. This change has been reflected in our segment operating results. Mortgage Insurance underwriting continues to be reported as an expense in the Mortgage Insurance segment. We include underwriting-related expenses for mortgage insurance, based on a pro-rata volume of mortgage applications excluding third-party contract underwriting services, in our Mortgage Insurance segment’s other operating expenses before corporate allocations. We include underwriting-related expenses for third-party contract underwriting services, based on a pro-rata volume of mortgage applications, in our Services segment’s cost of services and other operating expenses before corporate allocations, as applicable. We allocate to our Mortgage Insurance segment: (i) corporate expenses based on an allocated percentage of time spent on the Mortgage Insurance segment; (ii) all interest expense except for interest expense on the original principal balance of $300 million from the Senior Notes due 2019 that were issued to fund our purchase of Clayton; and (iii) all corporate cash and investments. We allocate to our Services segment: (i) corporate expenses based on an allocated percentage of time spent on the Services segment and (ii) as noted above, allocated interest expense based on the original amount of debt issued to fund our purchase of Clayton. No material corporate cash or investments are allocated to the Services segment. Inter-segment activities are recorded at market rates for segment reporting and eliminated in consolidation. Adjusted Pretax Operating Income (Loss) Our senior management, including our Chief Executive Officer (Radian’s chief operating decision maker), uses adjusted pretax operating income (loss) as our primary measure to evaluate the fundamental financial performance of each of Radian’s business segments and to allocate resources to the segments. Adjusted pretax operating income (loss) is defined as pretax income (loss) excluding the effects of: (i) net gains (losses) on investments and other financial instruments; (ii) loss on induced conversion and debt extinguishment; (iii) acquisition-related expenses; (iv) amortization or impairment of goodwill and other intangible assets; and (v) net impairment losses recognized in earnings. Although adjusted pretax operating income (loss) excludes certain items that have occurred in the past and are expected to occur in the future, the excluded items represent those that are: (i) not viewed as part of the operating performance of our primary activities or (ii) not expected to result in an economic impact equal to the amount reflected in pretax income (loss). These adjustments, along with the reasons for their treatment, are described below. (1) Net gains (losses) on investments and other financial instruments. The recognition of realized investment gains or losses can vary significantly across periods as the activity is highly discretionary based on the timing of individual securities sales due to such factors as market opportunities, our tax and capital profile and overall market cycles. Unrealized investment gains and losses arise primarily from changes in the market value of our investments that are classified as trading securities. These valuation adjustments may not necessarily result in realized economic gains or losses. Trends in the profitability of our fundamental operating activities can be more clearly identified without the fluctuations of these realized and unrealized gains or losses. We do not view them to be indicative of our fundamental operating activities. Therefore, these items are excluded from our calculation of adjusted pretax operating income (loss). (2) Loss on induced conversion and debt extinguishment. Gains or losses on early extinguishment of debt and losses incurred to purchase our convertible debt prior to maturity are discretionary activities that are undertaken in order to take advantage of market opportunities to strengthen our financial and capital positions; therefore, we do not view these activities as part of our operating performance. Such transactions do not reflect expected future operations and do not provide meaningful insight regarding our current or past operating trends. Therefore, these items are excluded from our calculation of adjusted pretax operating income (loss). (3) Acquisition-related expenses. Acquisition-related expenses represent the costs incurred to effect an acquisition of a business (i.e., a business combination). Because we pursue acquisitions on a strategic and selective basis and not in the ordinary course of our business, we do not view acquisition-related expenses as a consequence of a primary business activity. Therefore, we do not consider these expenses to be part of our operating performance and they are excluded from our calculation of adjusted pretax operating income (loss). (4) Amortization or impairment of goodwill and other intangible assets. Amortization of intangible assets represents the periodic expense required to amortize the cost of intangible assets over their estimated useful lives. Intangible assets with an indefinite useful life are also periodically reviewed for potential impairment, and impairment adjustments are made whenever appropriate. These charges are not viewed as part of the operating performance of our primary activities and therefore are excluded from our calculation of adjusted pretax operating income (loss). (5) Net impairment losses recognized in earnings . The recognition of net impairment losses on investments and the impairment of other long-lived assets does not result in a cash payment and can vary significantly in both amount and frequency, depending on market credit cycles and other factors. We do not view these impairment losses to be indicative of our fundamental operating activities. Therefore, whenever these losses occur, we exclude them from our calculation of adjusted pretax operating income (loss). Summarized operating results for our segments as of and for the periods indicated, are as follows: Three Months Ended Nine Months Ended (In thousands) 2017 2016 (1) 2017 2016 (1) Mortgage Insurance Net premiums written—insurance (2) $ 247,810 $ 240,999 $ 713,782 $ 499,662 (Increase) decrease in unearned premiums (11,108 ) (2,850 ) (26,184 ) 188,522 Net premiums earned—insurance 236,702 238,149 687,598 688,184 Net investment income 32,540 28,430 93,643 84,470 Other income 760 716 2,118 2,836 Total (3) 270,002 267,295 783,359 775,490 Provision for losses 35,980 56,151 100,926 149,500 Policy acquisition costs 5,554 6,119 18,406 17,901 Other operating expenses before corporate allocations 36,941 35,940 114,169 102,851 Total (4) 78,475 98,210 233,501 270,252 Adjusted pretax operating income before corporate allocations 191,527 169,085 549,858 505,238 Allocation of corporate operating expenses 11,737 11,911 41,817 35,526 Allocation of interest expense 11,282 15,360 34,539 50,596 Adjusted pretax operating income $ 168,508 $ 141,814 $ 473,502 $ 419,116 ______________________ (1) Reflects changes made during the fourth quarter of 2016 to align our segment reporting structure concurrent with changes in personnel reporting lines and management oversight related to contract underwriting performed on behalf of third parties. Revenue and expenses for this business are now reflected in the Services segment. As a result, Services revenue, cost of services and other operating expenses have increased, with offsetting reductions in Mortgage Insurance other income and other operating expenses. (2) Net of ceded premiums written under the QSR Transactions and the Single Premium QSR Transaction. See Note 7 for additional information. (3) Excludes net gains on investments and other financial instruments of $2.5 million and $5.0 million , respectively, for the three and nine months ended September 30, 2017 , and net gains on investments and other financial instruments of $7.7 million and $69.5 million , respectively, for the three and nine months ended September 30, 2016 , not included in adjusted pretax operating income. (4) Includes inter-segment expenses as follows: Three Months Ended Nine Months Ended (In thousands) 2017 2016 2017 2016 Inter-segment expenses $ 1,491 $ 2,156 $ 5,726 $ 5,702 Three Months Ended Nine Months Ended (In thousands) 2017 2016 (1) 2017 2016 (1) Services Services revenue (2) $ 41,062 $ 48,033 $ 121,126 $ 124,691 Cost of services 27,544 29,655 82,196 81,239 Other operating expenses before corporate allocations 12,781 13,575 38,188 40,973 Restructuring and other exit costs (3) 5,463 — 5,463 — Total 45,788 43,230 125,847 122,212 Adjusted pretax operating income (loss) before corporate allocations (4,726 ) 4,803 (4,721 ) 2,479 Allocation of corporate operating expenses 3,730 2,265 10,852 6,795 Allocation of interest expense 4,433 4,423 13,293 13,267 Adjusted pretax operating income (loss) $ (12,889 ) $ (1,885 ) $ (28,866 ) $ (17,583 ) ______________________ (1) Reflects changes made during the fourth quarter of 2016 to align our segment reporting structure concurrent with changes in personnel reporting lines and management oversight related to contract underwriting performed on behalf of third parties. Revenue and expenses for this business are now reflected in the Services segment. As a result, Services revenue, cost of services and other operating expenses have increased, with offsetting reductions in Mortgage Insurance other income and other operating expenses. (2) Includes inter-segment revenues as follows: Three Months Ended Nine Months Ended (In thousands) 2017 2016 2017 2016 Inter-segment revenues $ 1,491 $ 2,156 $ 5,726 $ 5,702 (3) Primarily includes employee severance and related benefit costs. Does not include impairment of long-lived assets, which is not considered a component of adjusted pretax operating income. Selected balance sheet information for our segments, as of the periods indicated, is as follows: At September 30, 2017 (In thousands) Mortgage Insurance Services (1) Total Total assets $ 5,630,687 $ 213,586 $ 5,844,273 At December 31, 2016 (In thousands) Mortgage Insurance Services Total Total assets $ 5,506,338 $ 356,836 $ 5,863,174 ______________________ (1) The decrease in total assets for the Services segment at September 30, 2017, as compared to December 31, 2016, is primarily due to the impairment of goodwill and other intangible assets. See Note 6 for further details. The reconciliation of adjusted pretax operating income to consolidated pretax income (loss) is as follows: Three Months Ended Nine Months Ended (In thousands) 2017 2016 2017 2016 Adjusted pretax operating income (loss): Mortgage Insurance (1) $ 168,508 $ 141,814 $ 473,502 $ 419,116 Services (1) (12,889 ) (1,885 ) (28,866 ) (17,583 ) Total adjusted pretax operating income 155,619 139,929 444,636 401,533 Net gains (losses) on investments and other financial instruments 2,480 7,711 4,960 69,524 Loss on induced conversion and debt extinguishment (45,766 ) (17,397 ) (51,469 ) (75,075 ) Acquisition-related expenses (2) (54 ) (10 ) (126 ) (161 ) Impairment of goodwill — — (184,374 ) — Amortization and impairment of other intangible assets (2,890 ) (3,292 ) (25,042 ) (9,931 ) Impairment of other long-lived assets (3) (6,575 ) — (6,575 ) — Consolidated pretax income $ 102,814 $ 126,941 $ 182,010 $ 385,890 ______________________ (1) Includes inter-segment expenses and revenues as listed in the notes to the preceding tables. (2) Acquisition-related expenses represent expenses incurred to effect the acquisition of a business, net of adjustments to accruals previously recorded for acquisition expenses. (3) Included within restructuring and other exit costs. See Note 1. On a consolidated basis, “adjusted pretax operating income” is a measure not determined in accordance with GAAP. Total adjusted pretax operating income is not a measure of total profitability, and therefore should not be considered in isolation or viewed as a substitute for GAAP pretax income. Our definition of adjusted pretax operating income may not be comparable to similarly-named measures reported by other companies. |
Note 4 - Fair Value of Financia
Note 4 - Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Available for sale securities, trading securities and certain other assets are recorded at fair value. All changes in the fair value of trading securities and certain other assets are included in our condensed consolidated statements of operations. All changes in the fair value of available for sale securities are recorded in AOCI. There were no significant changes to our fair value methodologies during the nine months ended September 30, 2017 . In accordance with GAAP, we established a three-level valuation hierarchy for disclosure of fair value measurements based on the transparency of inputs to the valuation of an asset or liability as of the measurement date. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level I measurements) and the lowest priority to unobservable inputs (Level III measurements). The level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the measurement in its entirety. The three levels of the fair value hierarchy are defined below: Level I — Unadjusted quoted prices for identical assets or liabilities in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level II — Prices or valuations based on observable inputs other than quoted prices in active markets for identical assets and liabilities; and Level III — Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. Level III inputs are used to measure fair value only to the extent that observable inputs are not available. The level of market activity used to determine the fair value hierarchy is based on the availability of observable inputs market participants would use to price an asset or a liability, including market value price observations. We provide a qualitative description of the valuation techniques and inputs used for recurring and non-recurring fair value measurements in our audited financial statements and notes thereto included in our 2016 Form 10-K. These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto included in our 2016 Form 10-K. The following is a list of assets that are measured at fair value by hierarchy level as of September 30, 2017 : (In thousands) Level I Level II Total Assets at Fair Value Investment Portfolio: U.S. government and agency securities $ 137,606 $ 12,217 $ 149,823 State and municipal obligations — 385,486 385,486 Money market instruments 155,957 — 155,957 Corporate bonds and notes — 2,291,267 2,291,267 RMBS — 207,150 207,150 CMBS — 495,229 495,229 Other ABS — 620,441 620,441 Foreign government and agency securities — 36,684 36,684 Equity securities 187,642 860 188,502 Other investments (1) — 39,620 39,620 Total Investments at Fair Value (2) 481,205 4,088,954 4,570,159 Total Assets at Fair Value $ 481,205 $ 4,088,954 $ 4,570,159 ______________________ (1) Comprising short-term certificates of deposit and commercial paper. (2) Does not include certain other invested assets ( $0.6 million ), primarily invested in limited partnerships, accounted for as cost-method investments and not measured at fair value. Also does not include cash collateral held under securities lending agreements reinvested in short-term investments, and includes securities loaned to third-party borrowers under securities lending agreements. The following is a list of assets that are measured at fair value by hierarchy level as of December 31, 2016 : (In thousands) Level I Level II Level III Total Assets at Fair Value Investment Portfolio: U.S. government and agency securities $ 237,479 $ — $ — $ 237,479 State and municipal obligations — 358,536 — 358,536 Money market instruments 431,472 — — 431,472 Corporate bonds and notes — 2,024,205 — 2,024,205 RMBS — 388,842 — 388,842 CMBS — 507,273 — 507,273 Other ABS — 450,128 — 450,128 Foreign government and agency securities — 32,807 — 32,807 Equity securities — 830 500 1,330 Other investments (1) — 28,663 500 29,163 Total Investments at Fair Value (2) 668,951 3,791,284 1,000 4,461,235 Total Assets at Fair Value $ 668,951 $ 3,791,284 $ 1,000 $ 4,461,235 ______________________ (1) Comprising short-term certificates of deposit and commercial paper, included within Level II, and convertible notes of non-public company issuers, included within Level III. (2) Does not include certain other invested assets ( $1.2 million ), primarily invested in limited partnerships, accounted for as cost-method investments and not measured at fair value. At December 31, 2016 , total Level III assets of $1.0 million accounted for less than 0.1% of total assets measured at fair value. Included in equity securities was a Level III investment of $0.5 million in a privately-placed equity security, purchased during the three months ended June 30, 2015. Included in other debt securities was a Level III investment of $0.5 million in debt securities from a non-public company issuer, purchased during the three months ended June 30, 2016. There were no related gains or losses recorded during the year ended December 31, 2016 on these investments. However, during the nine months ended September 30, 2017 , we recorded other-than-temporary credit-related impairment losses in earnings of $1.0 million on these securities. As a result, there were no Level III assets remaining in our portfolio at September 30, 2017 . See Note 5 for additional information. There were no Level III liabilities at September 30, 2017 or December 31, 2016 . There were no transfers between Level I and Level II for the three and nine months ended September 30, 2017 and 2016 . There were also no transfers involving Level III assets or liabilities for the three and nine months ended September 30, 2017 and 2016 . Other Fair Value Disclosure The carrying value and estimated fair value of other selected assets and liabilities not carried at fair value on our condensed consolidated balance sheets were as follows as of the dates indicated: September 30, 2017 December 31, 2016 (In thousands) Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Assets: Other invested assets $ 599 $ 3,404 $ 1,195 $ 3,789 Liabilities: Long-term debt 1,026,806 1,095,409 1,069,537 1,214,471 |
Note 5 - Investments
Note 5 - Investments | 9 Months Ended |
Sep. 30, 2017 | |
Investments [Abstract] | |
Investments | Investments Available for Sale Securities Our available for sale securities within our investment portfolio consisted of the following as of the dates indicated: September 30, 2017 (In thousands) Amortized Cost Fair Value Gross Unrealized Gains Gross Unrealized Losses Fixed-maturities available for sale: U.S. government and agency securities $ 61,287 $ 60,860 $ 187 $ 614 State and municipal obligations 125,485 129,507 4,461 439 Corporate bonds and notes 1,806,796 1,836,316 34,927 5,407 RMBS 176,789 175,408 796 2,177 CMBS 433,916 436,892 4,167 1,191 Other ABS 616,687 618,832 2,627 482 Foreign government and agency securities 31,437 32,392 961 6 Total fixed-maturities available for sale (1) 3,252,397 3,290,207 48,126 10,316 Equity securities available for sale (1) (2) 188,065 188,502 937 500 Total debt and equity securities $ 3,440,462 $ 3,478,709 $ 49,063 $ 10,816 ______________________ (1) Includes loaned securities under securities lending agreements that are classified as other assets in our condensed consolidated balance sheets, as further described below. (2) Primarily consists of investments in fixed income and equity exchange-traded funds and publicly-traded business development company equities. December 31, 2016 (In thousands) Amortized Cost Fair Value Gross Unrealized Gains Gross Unrealized Losses Fixed-maturities available for sale: U.S. government and agency securities $ 78,931 $ 75,474 $ 2 $ 3,459 State and municipal obligations 66,124 67,171 1,868 821 Corporate bonds and notes 1,463,720 1,455,628 14,320 22,412 RMBS 358,262 350,628 197 7,831 CMBS 429,057 428,289 2,255 3,023 Other ABS 433,603 434,728 2,037 912 Foreign government and agency securities 24,771 24,594 148 325 Other investments 2,000 2,000 — — Total fixed-maturities available for sale 2,856,468 2,838,512 20,827 38,783 Equity securities available for sale (1) 1,330 1,330 — — Total debt and equity securities $ 2,857,798 $ 2,839,842 $ 20,827 $ 38,783 ______________________ (1) Primarily consists of investments in Federal Home Loan Bank stock as required in connection with the memberships of Radian Guaranty and Radian Reinsurance in the FHLB. Gross Unrealized Losses and Fair Value of Available for Sale Securities The following tables show the gross unrealized losses and fair value of our securities deemed “available for sale” aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, as of the dates indicated. Included in the amounts as of September 30, 2017 , are loaned securities under securities lending agreements that are classified as other assets in our condensed consolidated balance sheets, as further described below. September 30, 2017 ( $ in thousands ) Description of Securities Less Than 12 Months 12 Months or Greater Total # of securities Fair Value Unrealized Losses # of securities Fair Value Unrealized Losses # of securities Fair Value Unrealized Losses U.S. government and agency securities 8 $ 37,926 $ 604 2 $ 1,580 $ 10 10 $ 39,506 $ 614 State and municipal obligations 17 60,210 439 — — — 17 60,210 439 Corporate bonds and notes 108 439,016 5,104 5 11,013 303 113 450,029 5,407 RMBS 29 114,243 1,862 5 14,262 315 34 128,505 2,177 CMBS 30 122,980 1,009 3 1,811 182 33 124,791 1,191 Other ABS 64 174,128 478 1 1,484 4 65 175,612 482 Foreign government and agency securities 2 1,196 6 — — — 2 1,196 6 Equity securities 11 79,856 500 — — — 11 79,856 500 Total 269 $ 1,029,555 $ 10,002 16 $ 30,150 $ 814 285 $ 1,059,705 $ 10,816 December 31, 2016 ( $ in thousands ) Description of Securities Less Than 12 Months 12 Months or Greater Total # of securities Fair Value Unrealized Losses # of securities Fair Value Unrealized Losses # of securities Fair Value Unrealized Losses U.S. government and agency securities 7 $ 73,160 $ 3,459 — $ — $ — 7 $ 73,160 $ 3,459 State and municipal obligations 7 30,901 821 — — — 7 30,901 821 Corporate bonds and notes 185 788,876 22,135 2 4,582 277 187 793,458 22,412 RMBS 56 311,031 7,822 1 1,398 9 57 312,429 7,831 CMBS 37 218,170 2,909 2 6,585 114 39 224,755 3,023 Other ABS 58 131,268 470 16 45,886 442 74 177,154 912 Foreign government and agency securities 12 13,034 325 — — — 12 13,034 325 Total 362 $ 1,566,440 $ 37,941 21 $ 58,451 $ 842 383 $ 1,624,891 $ 38,783 Impairments due to credit deterioration that result in a conclusion that the present value of cash flows expected to be collected will not be sufficient to recover the amortized cost basis of the security are considered other-than-temporary. Other declines in fair value (for example, due to interest rate changes, sector credit rating changes or company-specific rating changes) that result in a conclusion that the present value of cash flows expected to be collected will not be sufficient to recover the amortized cost basis of the security also may serve as a basis to conclude that an other-than-temporary impairment has occurred. To the extent we determine that a security is deemed to have had an other-than-temporary impairment, an impairment loss is recognized. During the nine months ended September 30, 2017 , we recorded other-than-temporary impairment losses in earnings of $1.0 million , including $0.5 million related to a convertible note of a non-public company issuer included in debt securities and $0.5 million related to a privately-placed equity security. We concluded that we would not recover the amortized cost basis of these securities due to credit deterioration. There were no credit-related impairment losses recognized in earnings or in AOCI during the year ended December 31, 2016 . Although we held securities in an unrealized loss position as of September 30, 2017 , we did not consider those securities to be other-than-temporarily impaired as of such date. For all investment categories, the unrealized losses of 12 months or greater duration as of September 30, 2017 were generally caused by interest rate or credit spread movements since the purchase date, and as such, we expect the present value of cash flows to be collected from these securities to be sufficient to recover the amortized cost basis of these securities. As of September 30, 2017 , we did not have the intent to sell any debt securities in an unrealized loss position, and we determined that it is more likely than not that we will not be required to sell the securities before recovery of their cost basis, which may be at maturity; therefore, we did not consider these investments to be other-than-temporarily impaired at September 30, 2017 . Trading Securities The trading securities within our investment portfolio, which are recorded at fair value, consisted of the following as of the dates indicated: (In thousands) September 30, December 31, Trading securities: U.S. government and agency securities $ — $ 33,042 State and municipal obligations 214,599 259,573 Corporate bonds and notes 327,306 453,617 RMBS 31,742 38,214 CMBS 58,337 78,984 Other ABS — 8,219 Foreign government and agency securities 4,292 8,213 Total $ 636,276 (1) $ 879,862 ______________________ (1) Includes loaned securities under securities lending agreements that are classified as other assets in our condensed consolidated balance sheets, as further described below. For trading securities held at September 30, 2017 and December 31, 2016 , we had net unrealized gains associated with those securities of $10.0 million and $16.8 million during the nine months ended September 30, 2017 and the year ended December 31, 2016 , respectively. For the nine months ended September 30, 2017 , we did not transfer any securities from the available for sale or trading categories. Securities Lending Agreements During the third quarter of 2017, we commenced participation in a securities lending program whereby we loan certain securities in our investment portfolio to Borrowers for short periods of time. These securities lending agreements are collateralized financing arrangements whereby we transfer securities to third parties through an intermediary in exchange for cash or other securities. In all of our securities lending agreements, the securities we transfer to Borrowers (loaned securities) may be transferred or loaned by the Borrowers; however, we maintain effective control over all loaned securities, including: (i) retaining ownership of the securities; (ii) receiving the related investment or other income; and (iii) having the right to request the return of the loaned securities at any time. Although we report such securities at fair value within other assets on our condensed consolidated balance sheets, the detailed information provided in this Note includes these securities. See Notes 1 and 8 for additional information. Under our securities lending agreements, the Borrower is required to provide to us collateral, consisting of cash or securities, in amounts generally equal to or exceeding (i) 102% of the value of the loaned securities ( 105% in the case of foreign securities) or (ii) another agreed-upon percentage not less than 100% of the market value of the loaned securities. Any cash collateral we receive may be invested in liquid assets. Under our securities lending agreements, the Borrower generally may return the loaned securities to us at any time, which would require us to return the collateral within the standard settlement period for the loaned securities on the principal exchange or market in which the securities are traded. We manage this liquidity risk associated with cash collateral by regularly monitoring our available sources of cash and collateral to ensure we can meet short-term liquidity demands in both normal and stressed scenarios. We may use our general liquidity resources to meet any potential cash demands when loaned securities are returned to us. The credit risk under these programs is reduced by the amounts of collateral received. On a daily basis, the value of the underlying securities that we have loaned to the Borrowers is compared to the value of cash and securities collateral we received from the Borrowers, and additional cash or securities are requested or returned, as applicable. In addition, we are indemnified against counterparty credit risk by the intermediary. Key components of our securities lending agreements at September 30, 2017 consisted of the following: (In thousands) September 30, Loaned securities: (1) Corporate bonds and notes $ 33,557 Foreign government and agency securities 120 Equity securities 27,199 Total loaned securities, at fair value $ 60,876 Total loaned securities, at amortized cost $ 60,740 Securities collateral on deposit from Borrowers (2) 25,589 Reinvested cash collateral, at estimated fair value (3) 36,782 ______________________ (1) Our securities loaned under securities lending agreements are included at fair value within other assets on our condensed consolidated balance sheets. All of our securities lending agreements are classified as overnight and continuous. None of the amounts are subject to offsetting. (2) Securities collateral on deposit with us from Borrowers may not be transferred or re-pledged unless the Borrower is in default, and is therefore not reflected in our condensed consolidated financial statements. (3) All cash collateral received has been reinvested in accordance with the securities lending and collateral agreements and is included in short-term investments. Amounts payable on the return of cash collateral under securities lending agreements are included within other liabilities on our condensed consolidated balance sheets. There were no securities lending transactions outstanding at December 31, 2016 . Net Gains (Losses) on Investments and Other Financial Instruments Net realized and unrealized gains (losses) on investments and other financial instruments consisted of: Three Months Ended Nine Months Ended September 30, (In thousands) 2017 2016 2017 2016 Net realized gains (losses): Fixed-maturities available for sale $ 137 $ 5,685 $ (3,552 ) $ 3,703 Equity securities available for sale 33 — 418 (170 ) Trading securities (223 ) 1,524 (6,266 ) (295 ) Short-term investments 14 38 (18 ) (1 ) Other invested assets — 631 — 631 Other gains (losses) 7 15 25 33 Net realized gains (losses) on investments (32 ) 7,893 (9,393 ) 3,901 Other-than-temporary impairment losses — — (1,000 ) — Unrealized gains (losses) on trading securities 2,353 (47 ) 14,517 62,862 Total net gains (losses) on investments 2,321 7,846 4,124 66,763 Net gains (losses) on other financial instruments 159 (135 ) 836 2,761 Net gains (losses) on investments and other financial instruments $ 2,480 $ 7,711 $ 4,960 $ 69,524 Contractual Maturities The contractual maturities of fixed-maturity investments were as follows: September 30, 2017 Available for Sale (In thousands) Amortized Cost Fair Value Due in one year or less (1) $ 41,767 $ 41,780 Due after one year through five years (1) 687,822 694,932 Due after five years through 10 years (1) 965,360 974,600 Due after 10 years (1) 330,056 347,763 RMBS (2) 176,789 175,408 CMBS (2) 433,916 436,892 Other ABS (2) 616,687 618,832 Total (3) $ 3,252,397 $ 3,290,207 ______________________ (1) Actual maturities may differ as a result of calls before scheduled maturity. (2) RMBS, CMBS and Other ABS are shown separately, as they are not due at a single maturity date. (3) Includes securities loaned under securities lending agreements. Other At December 31, 2016 , Radian Guaranty had $63.9 million in a collateral account invested in and classified as part of our trading securities and pledged to cover Loss Mitigation Activity on the loans subject to the Freddie Mac Agreement. During the third quarter of 2017, the scheduled final settlement date under the Freddie Mac Agreement occurred. As of September 30, 2017 , the remaining balance of $5.5 million in the collateral account was invested in and classified as short-term investments and pledged to cover Loss Mitigation Activity and pending claims activity already in process but not yet finalized. See Note 10 for additional information. |
Note 6 - Goodwill and Other Int
Note 6 - Goodwill and Other Intangible Assets, Net | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets, Net | Goodwill and Other Intangible Assets, Net All of our goodwill and other intangible assets relate to our Services segment. The following table shows the changes in the carrying amount of goodwill for the year-to-date periods ended September 30, 2017 and December 31, 2016 : (In thousands) Goodwill Accumulated Impairment Losses Net Balance at December 31, 2015 $ 197,265 $ (2,095 ) $ 195,170 Goodwill acquired — — — Impairment losses — — — Balance at December 31, 2016 197,265 (2,095 ) 195,170 Goodwill acquired 126 — 126 Impairment losses — (184,374 ) (184,374 ) Balance at September 30, 2017 $ 197,391 $ (186,469 ) $ 10,922 Accounting Policy Considerations Goodwill is an asset representing the estimated future economic benefits arising from the assets we have acquired that are not individually identified and separately recognized, and includes the value of the discounted expected future cash flows from these businesses, the workforce, expected synergies with our other affiliates and other unidentifiable intangible assets. Goodwill is deemed to have an indefinite useful life and is subject to review for impairment annually, or more frequently, whenever events and circumstances indicate potential impairment. For purposes of performing our goodwill impairment test, we have concluded that the Services segment constitutes one reporting unit to which all of our recorded goodwill is related. Events and circumstances that could result in an interim assessment of goodwill impairment and/or a potential impairment loss include, but are not limited to: (i) significant under-performance of the Services segment relative to historical or projected future operating results; (ii) significant changes in the strategy for the Services segment; (iii) significant negative industry or economic trends; and (iv) a decline in market capitalization below the book value attributable to the Services segment. The value of goodwill is supported by cash flow projections, which are primarily driven by projected transaction volume and margins. Management regularly updates certain assumptions related to our projections, including the likelihood of achieving the assumed potential revenues from new initiatives and business strategies, and if these or other items have a significant negative impact on the reporting unit’s projections, we may perform additional analysis to determine whether an impairment charge is needed. Lower earnings over sustained periods also can lead to impairment of goodwill, which could result in a charge to earnings. Given that our goodwill impairment analysis continues to rely significantly on achieving our projected future cash flows, failure to meet those projections may result in additional impairment in a future period. We generally perform our annual goodwill impairment test during the fourth quarter of each year, using balances as of the prior quarter. However, if there are events and circumstances that indicate that it is more likely than not that the fair value of a reporting unit is less than the carrying amount, we will perform a quantitative analysis on an interim basis. As part of our quantitative goodwill impairment assessment, we estimate the fair value of the reporting unit using primarily an income approach and, based on a lower weighting, a market approach. The key driver in our fair value analysis is forecasted future cash flows. In the second quarter of 2017, we early adopted the update to the accounting standard regarding goodwill and other intangibles, as discussed in Note 1 “—Significant Accounting Policies— Recent Accounting Pronouncements — Accounting Standards Adopted During 2017 .” In accordance with the updated standard, the fair value of a reporting unit is compared with its carrying amount, with any excess of the reporting unit’s carrying amount over its estimated fair value recognized as an impairment charge, up to the full amount of the goodwill allocated to the reporting unit, after adjusting the carrying value for any impairment of other intangibles or long-lived assets. For additional information on our accounting policies for goodwill and other intangible assets, see Note 1 herein and Note 1 of Notes to Consolidated Financial Statements in our 2016 Form 10-K. Impairment Analysis We performed an interim goodwill impairment test as of June 30, 2017, due to events and circumstances identified during our June 30, 2017 qualitative analysis that indicated that it was more likely than not that the fair value was less than the carrying amount. We performed our qualitative assessment of goodwill at June 30, 2017, focusing on the impact of certain key factors affecting our Services segment, including: (i) decisions related to changes in the business strategy for our Services segment determined in the second quarter of 2017, following our Chief Executive Officer’s evaluation of both existing products and new product development opportunities and (ii) second quarter 2017 results for our Services segment which were negatively impacted by market trends. Our expectation that these market trends will persist negatively impacted our projected future cash flows compared to the projections used in our prior valuation. Our Chief Executive Officer joined Radian in March 2017 and initiated a review to evaluate the strategic direction of the Services segment. Based on this strategic review, in the second quarter of 2017, we made several decisions with respect to business strategy for the segment in order to reposition the Services business to drive future growth and profitability. We determined to: (i) discontinue certain initiatives, as discussed below and (ii) shift the strategy of the Services segment to focus on core products and services that, in the current market environment, are expected to have higher growth potential, to produce more predictable, recurring revenue streams over time and to better align with our market expertise and the needs of our customers. Our recent strategic decisions include an intent to scale back or, in certain cases, discontinue certain planned or existing initiatives, such as discontinuing a new product line which, based on a market study received in the second quarter of 2017, would require significant additional investment to achieve the growth rates that had been expected. The impact of the strategic decisions determined during the second quarter resulted in a meaningful reduction in the fair value of the Services segment since the previous annual impairment test. During the second quarter of 2017, the Services segment performed below forecasted levels. In combination with the recent underperformance of the Services segment, the anticipated business and growth opportunities for certain business lines in our Services segment have been impacted by: (i) market demand, which was lower than anticipated; (ii) increased competition, including with respect to product alternatives and pricing; and (iii) delays in the realization of efficiencies and margin improvements associated with certain technology initiatives. The demand for certain products and services has decreased due to several factors. Given the decreased volume of refinancings in the mortgage market that began in the first half of 2017, our customers have excess internal capacity which they are choosing to utilize and as a result they are less reliant on outsourcing to us. Additionally, due to market and competitive pressures, we renewed the contract terms with one of our largest customers during the second quarter of 2017, with lower pricing and volumes than expected in order to retain the engagement. We also experienced lower than expected customer acceptance for certain of our current and proposed products and services. The impact of these factors, partially offset by related future expense reductions, constituted a majority of the decline in the fair value of the Services segment since the previous annual impairment test. Our quantitative valuation analysis, performed in connection with our annual goodwill impairment analysis in 2016, relied heavily on achieving the growth rates in our projected future cash flows. The impact of the market trends observed during the second quarter of 2017, which we currently expect to continue, together with our strategic decisions discussed above, resulted in changes to our expected product mix and the expected growth rates associated with various initiatives, which in turn generated material reductions to our forecasted net cash flows. Given the significant negative impact that the market trends and our strategic decisions would have on the timing and amount of our projected future cash flows in comparison to our original projections, we performed a quantitative analysis of the associated goodwill and other intangible assets as of June 30, 2017. As a result of the quantitative goodwill analysis, we recorded an impairment charge of $184.4 million for the three months ended June 30, 2017, to reduce the carrying amount of the Services segment to its estimated fair value. As discussed further below, prior to finalizing this amount, we also evaluated the recoverability of the segment’s other intangible assets and recorded impairment charges of $15.8 million related to the Services segment’s other intangible assets. See “Other Intangible Assets,” below. Substantially all of our impairment charges for goodwill and other intangible assets will continue to be deductible for tax purposes, over the original amortization period of approximately 15 years . Other Intangible Assets As of June 30, 2017, we also evaluated the recoverability of our other intangible assets. Factors affecting the estimated fair value of our goodwill, as described above, also affected the estimated recoverability of our other intangible assets. Based on our analysis in the second quarter of 2017, impairment was indicated for the Services segment’s client relationships and technology, related to certain product lines that were affected by the factors above. There was no impairment indicated for the remaining intangible assets, as the remaining carrying amounts were estimated to be recoverable despite the decline in projected earnings. Client relationships represent the value of the specifically acquired customer relationships and are valued using the excess earnings approach using estimated client revenues, attrition rates, implied royalty rates and discount rates. The excess earnings approach estimates the present value of expected earnings in excess of a traditional return on business assets. For the three months ended June 30, 2017, we recorded an impairment charge of $14.9 million related to the segment’s client relationships, primarily due to the changes in estimated client revenues based on the factors discussed above in “—Impairment Analysis.” The remaining carrying value of client relationships is supported by projected earnings. For the three months ended June 30, 2017, we also recorded an impairment charge of $0.9 million related to technology, representing the estimated unrecoverable value of a portion of the acquired proprietary software used to provide services in a product line impacted by the factors described above in “—Impairment Analysis.” The remaining carrying value of technology is supported by technology that we expect to continue to use in its current form, in either the same or an alternative capacity. The following is a summary of the gross and net carrying amounts and accumulated amortization of our other intangible assets as of the periods indicated: September 30, 2017 (In thousands) Original Amount Acquired Accumulated Amortization and Impairment Net Carrying Amount Client relationships (1) $ 83,363 $ (40,625 ) $ 42,738 Technology (2) 15,250 (8,382 ) 6,868 Trade name and trademarks 8,340 (2,787 ) 5,553 Client backlog 6,680 (5,813 ) 867 Non-competition agreements 185 (166 ) 19 Total $ 113,818 $ (57,773 ) $ 56,045 ______________________ (1) Includes an impairment charge of $14.9 million . (2) Includes an impairment charge of $0.9 million . December 31, 2016 (In thousands) Original Amount Acquired Accumulated Amortization Net Carrying Amount Client relationships $ 83,316 $ (19,696 ) $ 63,620 Technology 15,250 (5,497 ) 9,753 Trade name and trademarks 8,340 (2,125 ) 6,215 Client backlog 6,680 (5,235 ) 1,445 Non-competition agreements 185 (160 ) 25 Total $ 113,771 $ (32,713 ) $ 81,058 The estimated aggregate amortization expense for the remainder of 2017 and thereafter is as follows (in thousands): 2017 $ 2,754 2018 10,316 2019 8,790 2020 7,412 2021 5,834 2022 5,081 Thereafter 15,858 Total $ 56,045 Generally, for tax purposes, substantially all of our goodwill and other intangible assets are deductible and will be amortized over a period of 15 years from acquisition. |
Note 7 - Reinsurance
Note 7 - Reinsurance | 9 Months Ended |
Sep. 30, 2017 | |
Reinsurance Disclosures [Abstract] | |
Reinsurance | Reinsurance The effect of reinsurance on net premiums written and earned is as follows: Three Months Ended Nine Months Ended (In thousands) 2017 2016 2017 2016 Net premiums written—insurance: Direct $ 265,927 $ 261,456 $ 766,219 $ 748,110 Ceded (1) (18,117 ) (20,457 ) (52,437 ) (248,448 ) Net premiums written—insurance $ 247,810 $ 240,999 $ 713,782 $ 499,662 Net premiums earned—insurance: Direct $ 250,541 $ 258,074 $ 729,832 $ 747,342 Assumed 7 9 21 27 Ceded (1) (13,846 ) (19,934 ) (42,255 ) (59,185 ) Net premiums earned—insurance $ 236,702 $ 238,149 $ 687,598 $ 688,184 ______________________ (1) Net of profit commission. In 2012, Radian Guaranty entered into the QSR Transactions with a third-party reinsurance provider. Radian Guaranty has ceded the maximum amount permitted under the QSR Transactions; therefore, Radian Guaranty is no longer ceding NIW under these transactions. RIF ceded under the QSR Transactions was $1.3 billion and $1.7 billion as of September 30, 2017 and 2016 , respectively. In the first quarter of 2016, in order to proactively manage the risk and return profile of Radian Guaranty’s insured portfolio and manage its position under the PMIERs financial requirements in a cost-effective manner, Radian Guaranty entered into the Single Premium QSR Transaction with a panel of third-party reinsurers. RIF ceded under the Single Premium QSR Transaction was $4.3 billion and $3.6 billion as of September 30, 2017 and 2016 , respectively. See Note 8 of Notes to Consolidated Financial Statements in our 2016 Form 10-K for more information about our reinsurance transactions. As of December 31, 2017, our ability to cede Single Premium NIW under the Single Premium QSR Transaction expires. In anticipation of this expiration, we entered into the 2018 Single Premium QSR Transaction in October 2017. See Note 16 for additional information. The following tables show the amounts related to the QSR Transactions and the Single Premium QSR Transaction for the periods indicated: QSR Transactions Three Months Ended Nine Months Ended (In thousands) 2017 2016 2017 2016 Ceded premiums written (1) $ 4,621 $ 6,730 $ 15,137 $ 22,048 Ceded premiums earned (1) 6,826 10,597 22,064 33,094 Ceding commissions written 1,323 1,922 4,328 6,291 Ceding commissions earned (2) 2,925 3,974 10,198 12,199 Ceded losses, net 257 495 517 1,259 Single Premium QSR Transaction Three Months Ended Nine Months Ended (In thousands) 2017 2016 2017 2016 Ceded premiums written (1) $ 13,248 $ 13,004 $ 36,064 $ 222,085 (3) Ceded premiums earned (1) 6,771 8,608 18,941 21,748 Ceding commissions written 5,156 5,482 14,002 61,258 Ceding commissions earned (2) 3,536 4,382 9,721 11,173 Ceded losses 406 719 1,443 1,635 ______________________ (1) Net of profit commission. (2) Includes amounts reported in policy acquisition costs and other operating expenses. (3) Includes ceded premiums for policies written in prior periods. See Note 8 of Notes to Consolidated Financial Statements in our 2016 Form 10-K. |
Note 8 - Other Assets
Note 8 - Other Assets | 9 Months Ended |
Sep. 30, 2017 | |
Other Assets [Abstract] | |
Other Assets | Other Assets The following table shows the components of other assets as of the dates indicated: (In thousands) September 30, December 31, Deposit with the IRS (Note 9) $ 88,557 $ 88,557 Property and equipment (1) (2) 88,119 70,665 Corporate-owned life insurance 85,699 83,248 Loaned securities 60,876 — Accrued investment income 31,390 29,255 Deferred policy acquisition costs 15,816 14,127 Reinsurance recoverables 7,605 7,368 Other 60,954 50,615 Total other assets $ 439,016 $ 343,835 ______________________ (1) Property and equipment at cost, less accumulated depreciation of $101.7 million and $118.5 million at September 30, 2017 and December 31, 2016 , respectively. Depreciation expense was $4.6 million and $2.9 million for the three-month periods ended September 30, 2017 and 2016 , respectively, and $12.8 million and $7.6 million for the nine-month periods ended September 30, 2017 and 2016 , respectively. (2) Includes $45.0 million and $49.7 million at September 30, 2017 and December 31, 2016 , respectively, related to our technology upgrade project and $15.7 million at September 30, 2017 of leasehold improvements related to our new corporate headquarters. |
Note 9 - Income Taxes
Note 9 - Income Taxes | 9 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes As required under the accounting standard regarding accounting for income taxes, our deferred tax assets (“DTAs”) and deferred tax liabilities (“DTLs”) are recognized under the balance sheet method, which recognizes the future tax effect of temporary differences between the amounts recorded in our financial statements and the tax bases of these amounts. DTAs and DTLs are measured using the enacted tax rates expected to apply to taxable income in the periods in which the DTA or DTL is expected to be realized or settled. Our provision for income taxes for interim financial periods is based on an estimate of our annual effective tax rate for the full year. When estimating our full year 2017 and 2016 annual effective tax rates, we accounted for discrete items at the federal applicable tax rate, including: (i) the tax effects of gains and losses on our investments; (ii) excess tax benefits or deficiencies realized in 2017 from employee share-based payments; (iii) return-to-provision adjustments; (iv) prior year items relating to the accounting for uncertainty in income taxes; (v) the impairments of goodwill and other intangible assets in 2017; and (vi) certain other adjustments. As of September 30, 2017 , for federal income tax purposes and before any consideration of the impact of our potential IRS Settlement, we have generated certain tax attributes. We had approximately $297.4 million of NOL carryforwards. To the extent not utilized, the NOL carryforwards will expire during tax years 2031 and 2032. We also have research and development tax credit carryforwards of $6.4 million that, if not utilized, will expire during tax years 2031 through 2036. Additionally, we had approximately $36.2 million of AMT credit carryforwards, which have no expiration date. We are required to establish a valuation allowance against our DTAs when it is more likely than not that all or some portion of our DTAs will not be realized. At each balance sheet date, we assess our need for a valuation allowance. Our assessment is based on all available evidence, both positive and negative. This requires management to exercise judgment and make assumptions regarding whether our DTAs will be realized in future periods. In making this assessment as of September 30, 2017 , we determined that certain of our non-insurance subsidiaries within Radian may continue to generate taxable losses on a separate company basis in the near term and may not be able to fully utilize certain of their state and local NOLs on their state and local tax returns. As of September 30, 2017 , our valuation allowance is $64.1 million with respect to the DTAs relating to these separate company NOLs and other state timing adjustments. We are contesting adjustments resulting from the examination by the IRS of our 2000 through 2007 consolidated federal income tax returns. The IRS opposes the recognition of certain tax losses and deductions that were generated through our investment in a portfolio of non-economic REMIC residual interests and has proposed denying the associated tax benefits of these items. We appealed these proposed adjustments to Appeals and made “qualified deposits” with the U.S. Treasury of $85 million in June 2008 relating to the 2000 through 2004 tax years and $4 million in May 2010 relating to the 2005 through 2007 tax years, in order to avoid the accrual of incremental above-market-rate interest with respect to the proposed adjustments. We attempted to reach a compromised settlement with Appeals, but in September 2014 we received Notices of Deficiency covering the 2000 through 2007 tax years that assert unpaid taxes and penalties of $157 million . The Deficiency Amount has not been reduced to reflect our NOL carryback ability. As of September 30, 2017 , there also would be interest of approximately $146 million related to these matters. Depending on the outcome, additional state income taxes, penalties and interest (estimated in the aggregate to be approximately $36 million as of September 30, 2017 ) also may become due when a final resolution is reached. The Notices of Deficiency also reflected additional amounts due of $105 million , which are primarily associated with the disallowance of the previously filed carryback of our 2008 NOL to the 2006 and 2007 tax years. We currently believe that the disallowance of our 2008 NOL carryback is a precautionary position by the IRS and that we will ultimately maintain the benefit of this NOL carryback claim. On December 3, 2014, we petitioned the U.S. Tax Court to litigate the Deficiency Amount. On September 1, 2015, we received a notice that the case had been scheduled for trial. However, the parties have jointly filed, and the U.S. Tax Court has approved, motions for continuance in this matter to postpone the trial date. Also, in February 2016, the U.S. Tax Court approved a joint motion to consolidate for trial, briefing and opinion our case with a similar case involving MGIC Investment Corporation. During 2016, we held several meetings with the IRS in an attempt to reach a compromised settlement on the issues presented in our dispute. In October 2017, the parties informed the U.S. Tax Court that they believe they have reached agreement in principle on all issues presented in the dispute and that the parties are currently reviewing the computations reflecting the agreed upon settlement terms. The resolution must be reported to the JCT for review and cannot be finalized until the IRS considers the views, if any, expressed by the JCT about the matter. If we are unable to complete a compromised settlement, then the ongoing litigation could take several years to resolve and may result in substantial legal expenses. We can provide no assurance regarding the outcome of any such litigation or whether a compromised settlement with the IRS will ultimately be reached. We currently believe that an adequate provision for income taxes has been made for the potential liabilities that may result from this matter. However, if the ultimate resolution of this matter produces a result that differs materially from our current expectations, there could be a material impact on our effective tax rate, results of operations and cash flows. |
Note 10 - Losses and LAE
Note 10 - Losses and LAE | 9 Months Ended |
Sep. 30, 2017 | |
Insurance Loss Reserves [Abstract] | |
Losses and Loss Adjustment Expense | Losses and Loss Adjustment Expense All of the balance and activity of our consolidated reserve for losses and LAE relate to the Mortgage Insurance segment. The following table shows our reserve for losses and LAE by category at the end of each period indicated: (In thousands) September 30, December 31, Reserves for losses by category: Prime $ 296,885 $ 379,845 Alt-A 112,033 148,006 A minus and below 78,048 101,653 IBNR and other (1) 13,085 71,107 LAE 14,687 18,630 Reinsurance recoverable (2) 7,445 6,816 Total primary reserves 522,183 726,057 Pool 18,630 31,853 IBNR and other 14,576 673 LAE 550 932 Reinsurance recoverable (2) 25 35 Total pool reserves 33,781 33,493 Total First-lien reserves 555,964 759,550 Other (3) 524 719 Total reserve for losses $ 556,488 $ 760,269 ______________________ (1) At December 31, 2016, primarily related to expected payments under the Freddie Mac Agreement. During the third quarter of 2017, the scheduled final settlement date under the Freddie Mac Agreement occurred and therefore, except for loans with loss mitigation and claims activity already in process, most of the loans subject to the Freddie Mac Agreement were removed from RIF and IIF because the insurance no longer remains in force. See “—Freddie Mac Agreement,” below for additional information. (2) Represents ceded losses on captive reinsurance transactions, the QSR Transactions and the Single Premium QSR Transaction. (3) Does not include our Second-lien premium deficiency reserve that is included in other liabilities. The following table presents information relating to our reserve for losses, including our IBNR reserve and LAE but excluding our Second-lien premium deficiency reserve, for the periods indicated: Nine Months Ended (In thousands) 2017 2016 Balance at beginning of period $ 760,269 $ 976,399 Less: Reinsurance recoverables (1) 6,851 8,286 Balance at beginning of period, net of reinsurance recoverables 753,418 968,113 Add: Losses and LAE incurred in respect of default notices reported and unreported in: Current year (2) 145,798 152,320 Prior years (45,331 ) (3,906 ) Total incurred 100,467 148,414 Deduct: Paid claims and LAE related to: Current year (2) 3,639 2,725 Prior years 301,228 298,352 Total paid 304,867 (3) 301,077 Balance at end of period, net of reinsurance recoverables 549,018 815,450 Add: Reinsurance recoverables (1) 7,470 6,484 Balance at end of period $ 556,488 $ 821,934 ______________________ (1) Related to ceded losses recoverable, if any, on captive reinsurance transactions, the QSR Transactions and the Single Premium QSR Transaction. See Note 7 for additional information. (2) Related to underlying defaulted loans with a most recent default notice dated in the year indicated. For example, if a loan had defaulted in a prior year, but then subsequently cured and later re-defaulted in the current year, that default would be considered a current year default. (3) Includes the payment of $54.8 million made in connection with the scheduled final settlement of the Freddie Mac Agreement in the third quarter of 2017. Reserve Activity 2017 Activity Our loss reserves at September 30, 2017 declined as compared to December 31, 2016 , primarily as a result of the amount of paid claims and Cures continuing to outpace losses incurred related to new default notices reported in the current year. Reserves established for new default notices were the primary driver of our total incurred loss for the nine months ended September 30, 2017 , and they were primarily impacted by the number of new primary default notices received in the period and our related gross Default to Claim Rate assumption applied to those new defaults, which was 10.5% as of September 30, 2017 . The provision for losses during the first nine months of 2017 was positively impacted by favorable reserve development on prior year defaults, which was primarily driven by a reduction during the period in certain Default to Claim Rate assumptions for these prior year defaults compared to the assumptions used at December 31, 2016 . The reductions in Default to Claim Rate assumptions resulted from observed trends, primarily higher Cures than were previously estimated. The positive development in prior year defaults was partially offset by incremental IBNR reserves of $14.2 million to reflect the estimated payment for future losses, primarily on performing loans in our Legacy Portfolio that are likely to be affected by an expected pool commutation. Total claims paid increased for the nine months ended September 30, 2017 , compared to the same period in 2016, primarily as a result of payments that, as expected, were made in connection with the final settlement of the Freddie Mac Agreement in the third quarter of 2017. See “— Freddie Mac Agreement ” below for additional information. During the third quarter of 2017, Hurricanes Harvey and Irma caused extensive property damage to areas of Texas, Florida and Georgia, as well as other general disruptions including power outages and flooding. At September 30, 2017 , our total primary mortgage insurance exposure to mortgages in counties affected by these storms and subsequently designated as FEMA Designated Areas is approximately $4.4 billion of RIF on approximately $16.8 billion of IIF. This exposure represents approximately 8.8% of our primary mortgage insurance RIF as of September 30, 2017 . Although the mortgage insurance we write protects the lenders from a portion of losses resulting from loan defaults, it does not provide protection against property loss or physical damage. Our Master Policies contain an exclusion against physical damage, including damage caused by floods or other natural disasters. Depending on the policy form and circumstances, we may, among other things, deduct the cost to repair or remedy physical damage above a de minimis amount from a claim payment and/or, under certain circumstances, deny a claim where (i) the property underlying a mortgage in default is subject to unrestored physical damage or (ii) the physical damage is deemed to be the principal cause of default. As of September 30, 2017 , our provision for losses has not been materially impacted by increased defaults in FEMA Designated Areas related to Hurricanes Harvey and Irma. However, the future reserve impact may be affected by various factors, including the pace of economic recovery in the FEMA Designated Areas. 2016 Activity Our loss reserves at September 30, 2016 declined as compared to December 31, 2015 , primarily because the amount of paid claims outpaced losses incurred related to new default notices reported in the current year. Reserves established for new default notices were the primary driver of our total incurred loss for the nine months ended September 30, 2016 , and they were impacted primarily by the number of new primary default notices received in the period and our related gross Default to Claim Rate assumption applied to those new defaults, which was approximately 12.0% as of September 30, 2016 . The impact to incurred losses from reserve development on default notices reported in prior years was not significant during the first nine months of 2016. Reserve Assumptions Default to Claim Rate Our aggregate weighted average Default to Claim Rate assumption for our primary loans (net of Claim Denials and Rescissions) used in estimating our primary reserve for losses was 40% ( 38% excluding pending claims) at September 30, 2017 , and 42% ( 40% excluding pending claims) at December 31, 2016 . This decrease was primarily due to a shift in the mix of defaults during the nine months ended September 30, 2017 , with a slightly lower proportion of pending claims in our total inventory, as well as the decrease in our gross Default to Claim Rate assumptions. During the nine months ended September 30, 2017 , our gross Default to Claim Rate assumption for new primary defaults was reduced from 12% as of December 31, 2016 , to 10.5% . As of September 30, 2017 , our gross Default to Claim Rates on our primary portfolio ranged from 10.5% for new defaults, up to 62% for defaults not in foreclosure stage, and 81% for Foreclosure Stage Defaults. Loss Mitigation Our estimate of expected Rescissions and Claim Denials (net of expected Reinstatements) embedded in our Default to Claim Rate is generally based on our recent experience. Consideration is also given for differences in characteristics between those previously rescinded policies and denied claims and the loans remaining in our defaulted inventory, as well as the estimated impact of the BofA Settlement Agreement, which is discussed below. Although our estimates of future Loss Mitigation Activities have been declining, they continue to be elevated compared to levels experienced before 2009. Since 2009, the elevated levels of our rate of Rescissions, Claim Denials and Claim Curtailments have significantly reduced our paid losses and have resulted in a reduction in our loss reserve. As our Legacy Portfolio has become a smaller percentage of our overall insured portfolio, we have experienced a reduced amount of Loss Mitigation Activity with respect to the claims we receive, and we expect this trend to continue. As a result, our anticipated future Loss Mitigation Activity is not expected to mitigate our paid losses to the same extent as in the years immediately following the financial crisis. Our estimate of net future Loss Mitigation Activities reduced our loss reserve as of September 30, 2017 and December 31, 2016 by approximately $23 million and $39 million , respectively. The amount of estimated Loss Mitigation Activities incorporated into our reserve analysis at any point in time is affected by a number of factors, including our estimated rate of Rescissions, Claim Denials and Claim Curtailments on future claims, as well as the volume and attributes of our defaulted insured loans, our estimated Default to Claim Rate and our estimated Claim Severity, among other assumptions. Our assumptions also reflect the estimated future impact of the BofA Settlement Agreement, as discussed below. Our reported Rescission, Claim Denial and Claim Curtailment activity in any given period is subject to challenge by our lender and servicer customers. We expect that a portion of previous Rescissions will be reinstated and previous Claim Denials will be resubmitted with the required documentation and ultimately paid; therefore, we have incorporated this expectation into our IBNR reserve estimate. Our IBNR reserve estimate of $24.8 million and $14.3 million at September 30, 2017 and December 31, 2016 , respectively, includes reserves for this activity, and, with respect to our IBNR estimate at September 30, 2017, also includes $14.2 million to reflect the estimated payment for future losses from an expected pool commutation, as discussed above. We also accrue for the premiums that we expect to refund to our lender customers in connection with our estimated Rescissions. Agreements BofA Settlement Agreement On September 16, 2014, Radian Guaranty entered into the BofA Settlement Agreement in order to resolve various actual and potential claims or disputes related to the parties’ respective rights and duties as to mortgage insurance coverage on certain Subject Loans. Implementation of the BofA Settlement Agreement commenced on February 1, 2015 and was completed by December 31, 2015. Except for certain limited circumstances, Radian Guaranty agreed that with respect to future Legacy Loans (as defined in and subject to the agreement, Legacy Loans where a claim decision has been or will be communicated by Radian Guaranty after February 13, 2013), it will not assert any origination error or servicing defect as a basis for a decision not to pay a claim, nor will it effect a Claim Curtailment of such claims. See Note 11 of Notes to Consolidated Financial Statements in our 2016 Form 10-K for additional information about the BofA Settlement Agreement. Freddie Mac Agreement At December 31, 2016 , Radian Guaranty had $63.9 million in a collateral account invested in and classified as part of our trading securities and pledged to cover Loss Mitigation Activity on the loans subject to the Freddie Mac Agreement. During the third quarter of 2017, the scheduled final settlement date under the Freddie Mac Agreement occurred and, as expected, we paid $54.8 million to Freddie Mac, which reduced the remaining balance in the collateral account to $5.5 million at September 30, 2017. These amounts were invested in and classified as short-term investments and pledged to cover Loss Mitigation Activity and pending claims activity already in process but not yet finalized. As of September 30, 2017 , we have $2.8 million remaining in reserve for losses that we expect to pay to Freddie Mac from the remaining funds in the collateral account. |
Note 11 - Long-Term Debt
Note 11 - Long-Term Debt | 9 Months Ended |
Sep. 30, 2017 | |
Long-term Debt, Unclassified [Abstract] | |
Long-term Debt | Long-Term Debt The carrying value of our long-term debt at September 30, 2017 and December 31, 2016 was as follows: (In thousands) September 30, December 31, 5.500% Senior Notes due 2019 $ 157,470 $ 296,907 5.250% Senior Notes due 2020 231,618 345,308 7.000% Senior Notes due 2021 194,974 344,362 4.500% Senior Notes due 2024 442,223 — 3.000% Convertible Senior Notes due 2017 521 20,947 2.250% Convertible Senior Notes due 2019 — 62,013 Total long-term debt $ 1,026,806 $ 1,069,537 Extinguishment of Debt Repurchases of Senior Notes due 2019, 2020 and 2021 During the third quarter of 2017, pursuant to cash tender offers to purchase a portion of our outstanding Senior Notes due 2019, 2020 and 2021, we purchased aggregate principal amounts of $141.4 million , $115.9 million and $152.3 million of our Senior Notes due 2019, 2020 and 2021, respectively. We funded the purchases with $450.0 million in cash (plus accrued and unpaid interest due on the purchased notes). These purchases resulted in a loss on induced conversion and debt extinguishment of $45.8 million . Following these purchases, the remaining principal amounts of the outstanding Senior Notes due 2019, 2020 and 2021 were $158.6 million , $234.1 million and $197.7 million , respectively, at September 30, 2017. Repurchases of Convertible Senior Notes due 2017 During the second quarter of 2017, we purchased an aggregate principal amount of $21.6 million of our outstanding Convertible Senior Notes due 2017. We funded the purchases with $31.6 million in cash (plus accrued and unpaid interest due on the purchased notes). These purchases of Convertible Senior Notes due 2017 resulted in a loss on induced conversion and debt extinguishment of $1.2 million . As of September 30, 2017 , $0.5 million of the principal amount of the Convertible Senior Notes due 2017 remained outstanding and mature in November 2017. In connection with our purchases of Convertible Senior Notes due 2017, we terminated a corresponding portion of the capped call transactions we entered into in 2010 related to the initial issuance of the Convertible Senior Notes due 2017. We received proceeds of $4.1 million for this termination. Conversion of Convertible Senior Notes due 2019 In November 2016, we announced our intent to exercise our redemption option for the remaining $68.0 million aggregate principal amount of our Convertible Senior Notes due 2019. As a result of the average closing price of our common stock exceeding the conversion price of $10.60 prior to the redemption date, all of the holders of these notes elected to exercise their conversion rights. Radian elected to settle all of the notes surrendered for conversion with cash. We settled our obligations with respect to these conversions on January 27, 2017, with a cash payment of $110.1 million . At the time of settlement, this transaction resulted in a pretax charge of $4.5 million . Senior Notes due 2024 In September 2017, we issued $450 million aggregate principal amount of Senior Notes due 2024 and received net proceeds of $443.3 million . These notes mature on October 1, 2024 and bear interest at a rate of 4.500% per annum, payable semi-annually on April 1 and October 1 of each year, with interest payments commencing on April 1, 2018. We have the option to redeem these notes, in whole or in part, at any time or from time to time prior to July 1, 2024 (the “Par Call Date”) at a redemption price equal to the greater of: (i) 100% of the aggregate principal amount of the notes to be redeemed and (ii) the make-whole amount, which is the sum of the present values of the remaining scheduled payments of principal and interest in respect of the notes to be redeemed, calculated from the redemption date to the Par Call Date, discounted to the redemption date at the applicable treasury rate plus 50 basis points, plus, in each case, accrued and unpaid interest thereon to, but excluding, the redemption date. At any time on or after the Par Call Date, we may, at our option, redeem the notes in whole or in part at a redemption price equal to 100% of the aggregate principal amount of the notes to be redeemed, plus accrued and unpaid interest thereon to, but excluding, the redemption date. The indenture governing the Senior Notes due 2024 contains covenants customary for securities of this nature, including covenants related to the payments of the notes, reports, compliance certificates and modification of the covenants. Additionally, the indenture includes covenants restricting us from encumbering the capital stock of a designated subsidiary (as defined in the indenture for the notes) or disposing of any capital stock of any designated subsidiary unless either all of the stock is disposed of or we retain more than 80% of the stock. Convertible Senior Notes due 2017 and 2019 Upon the original issuance of the Convertible Senior Notes due 2017 and 2019, in accordance with accounting standards related to convertible debt instruments that may be settled in cash upon conversion, the Company recorded a pretax equity component, net of the capped call transaction (with respect to the Convertible Senior Notes due 2017) and related issuance costs (with respect to the Convertible Senior Notes due 2017 and 2019). The pretax equity component is not subject to remeasurement, and therefore remains unchanged unless a reduction of outstanding principal occurs. The pretax equity component associated with our Convertible Senior Notes due 2017 decreased from $5.0 million at December 31, 2016 to $0.1 million at September 30, 2017, as a result of our purchases of the associated notes during 2017. In addition, as a result of settling our obligations on the remaining Convertible Senior Notes due 2019 during the first three months of 2017, the associated pretax equity component of $13.1 million at December 31, 2016 was eliminated. Beginning on August 15, 2017 until the close of business on November 13, 2017 (the second scheduled trading day immediately preceding the maturity date), holders of our Convertible Senior Notes due 2017 may submit their notes for conversion regardless of the stock price or other conversion thresholds. During the same period, however, we have the option to call the Convertible Senior Notes due 2017. Therefore, at September 30, 2017, the pretax equity component associated with our Convertible Senior Notes due 2017 is not subject to reclassification as mezzanine (temporary) equity, and is classified as permanent equity. See Note 12 of Notes to Consolidated Financial Statements in our 2016 Form 10-K for additional information. Issuance and transaction costs incurred at the time of the original issuance of the convertible notes were allocated to the liability and equity components in proportion to the allocation of proceeds and are accounted for as debt issuance costs and equity issuance costs, respectively. The convertible notes are reflected on our condensed consolidated balance sheets as follows: Convertible Senior Notes due 2017 Convertible Senior Notes due 2019 (In thousands) September 30, December 31, September 30, December 31, Liability component: Principal $ 526 $ 22,233 $ — $ 68,024 Debt discount, net (1) (5 ) (1,221 ) — (5,461 ) Debt issuance costs (1) — (65 ) — (550 ) Net carrying amount $ 521 $ 20,947 $ — $ 62,013 ______________________ (1) Included within long-term debt and is being amortized over the life of the convertible notes. The following tables set forth total interest expense recognized related to the convertible notes for the periods indicated: Convertible Senior Notes due 2017 Three Months Ended Nine Months Ended (In thousands) 2017 2016 2017 2016 Contractual interest expense (benefit) (1) $ 4 $ 166 $ 312 $ 705 Amortization of debt issuance costs — 17 32 71 Amortization of debt discount 10 322 615 1,344 Total interest expense (benefit) (1) $ 14 $ 505 $ 959 $ 2,120 ______________________ (1) Interest expense (benefit) represents expense incurred, net of adjustments to accruals previously recorded. Convertible Senior Notes due 2019 Three Months Ended Nine Months Ended (In thousands) 2017 2016 2017 2016 Contractual interest expense (benefit) (1) $ — $ 493 $ (510 ) $ 3,043 Amortization of debt issuance costs — 74 16 447 Amortization of debt discount — 737 163 4,434 Total interest expense (benefit) (1) $ — $ 1,304 $ (331 ) $ 7,924 ______________________ (1) Interest expense (benefit) represents expense incurred, net of adjustments to accruals previously recorded. |
Note 12 - Commitments and Conti
Note 12 - Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Proceedings See Note 13 of Notes to Consolidated Financial Statements in our 2016 Form 10-K for information regarding our accounting policies for contingencies. We are routinely involved in a number of legal actions and proceedings, including litigation and other disputes arising in the ordinary course of our business. The legal and regulatory matters discussed below and in our 2016 Form 10-K could result in adverse judgments, settlements, fines, injunctions, restitutions or other relief that could require significant expenditures or have other effects on our business. Management believes, based on current knowledge and after consultation with counsel, that the outcome of such actions will not have a material adverse effect on our consolidated financial condition. However, the outcome of litigation and other legal and regulatory matters and proceedings is inherently uncertain, and it is possible that one or more of the matters currently pending or threatened could have an unanticipated adverse effect on our liquidity, financial condition or results of operations for any particular period. As described in Note 9 , on September 4, 2014, we received formal Notices of Deficiency from the IRS related to certain tax losses and deductions resulting from our investment in a portfolio of non-economic REMIC residual interests. We believe that an adequate provision for income taxes has been made for the potential liabilities that may result from this matter. However, if the ultimate resolution of this matter produces a result that differs materially from our current expectations, there could be a material impact on our effective tax rate, results of operations and cash flows. On December 22, 2016, Ocwen Loan Servicing, LLC and Homeward Residential, Inc. (collectively, “Ocwen”) filed a complaint against Radian Guaranty (the “Complaint”). Ocwen has also initiated legal proceedings against several other mortgage insurers. The action filed against Radian Guaranty, titled Ocwen, et al. v. Radian Guaranty, is pending in the U.S. District Court for the Eastern District of Pennsylvania (the “Court”). The Complaint alleged breach of contract and bad faith claims and sought monetary damages and declaratory relief in regard to certain claims handling practices on future insurance claims. On December 17, 2016, Ocwen separately filed a parallel arbitration petition against Radian Guaranty (the “Petition”) before the American Arbitration Association (“AAA”) that asserted substantially the same allegations as contained in the Complaint (the Complaint and the Petition are collectively referred to as the “Filings”). The Filings listed 9,420 mortgage insurance certificates (“Certificates”) issued under multiple insurance policies, including Pool Insurance policies, as being the subject of these proceedings. On March 3, 2017, Radian Guaranty filed with the Court: (i) a motion to dismiss Ocwen’s Complaint or, in the alternative, for a more definite statement and (ii) a motion to enjoin Ocwen’s parallel arbitration. On June 5, 2017, Ocwen filed an Amended Complaint and an Amended Petition (collectively, the “Amended Filings”) with the Court and the AAA, respectively, which together list 8,870 Certificates as being the subject of these proceedings. On June 30, 2017, Radian Guaranty filed with the Court renewed motions to dismiss Ocwen’s Amended Complaint and to enjoin Ocwen’s parallel arbitration. In July 2017, the Court denied Radian Guaranty’s motions to dismiss Ocwen’s Amended Complaint and to enjoin Ocwen’s parallel arbitration. In August 2017, Radian Guaranty filed an Answer With Affirmative Defenses and Counterclaim against Ocwen with the Court and in September Radian Guaranty filed an Amended Counterclaim. Also, in September 2017, Radian Guaranty filed an Answer With Affirmative Defenses and Counterclaim against Ocwen with the AAA. In October 2017, Ocwen filed a Motion to Dismiss Radian’s Amended Counterclaim (“Motion”) and Radian filed a Brief in Opposition to the Motion. On October 24, 2017, the Court issued an Order granting in part and denying in part Ocwen’s Motion, and directed Ocwen to answer Radian Guaranty’s Amended Counterclaim. Radian Guaranty believes that Ocwen’s allegations and claims in the legal proceedings described above are without merit and legally deficient, and plans to defend these claims vigorously. We are not able to estimate a reasonably possible loss, if any, or range of loss in this matter because of the preliminary stage of the proceedings. We also are periodically subject to reviews and audits, as well as inquiries, information-gathering requests and investigations. In connection with these matters, from time to time we receive requests and subpoenas seeking information and documents related to aspects of our business. In March 2017, Green River Capital, a subsidiary of Clayton, received a letter from the staff of the SEC stating that it is conducting an investigation captioned, “In the Matter of Certain Single Family Rental Securitizations,” and that it is requesting information from market participants. The letter asks Green River Capital to provide information regarding broker price opinions that Green River Capital provided on properties included in SFR securitization transactions. Green River Capital is cooperating with the SEC. Our Master Policies establish the timeline within which any suit or action arising from any right of an insured under the policy generally must be commenced. In general, any suit or action arising from any right of an insured under the policy must be commenced within two years after such right first arose for primary insurance and within three years for certain other policies, including certain Pool Insurance policies. Although we believe that our Loss Mitigation Activities are justified under our policies, from time to time we face challenges from certain lender and servicer customers regarding our Loss Mitigation Activities, which have resulted in some reversals of our decisions regarding Rescissions, Claim Denials or Claim Curtailments. We are currently in discussions with these customers regarding our Loss Mitigation Activities and claim payment practices, which if not resolved, could result in arbitration or judicial proceedings and we may need to reassume the risk on, and increase loss reserves for, the associated policies or pay additional claims. See Note 10 for additional information. Further, there are loans in our total defaulted portfolio (in particular, our older defaulted portfolio) for which actions or proceedings (such as foreclosure) may not have been commenced within the outermost deadline in our Prior Master Policy. We are evaluating these loans regarding this potential violation and our corresponding rights under the Prior Master Policy. While we can provide no assurance regarding the ultimate resolution of these issues, it is possible that arbitration or legal proceedings could result. Other Securities regulations became effective in 2005 that impose enhanced disclosure requirements on issuers of ABS (including mortgage-backed securities). To allow our customers to comply with these regulations at that time, we typically were required, depending on the amount of credit enhancement we were providing, to provide: (i) audited financial statements for the insurance subsidiary participating in the transaction or (ii) a full and unconditional holding company-level guarantee for our insurance subsidiaries’ obligations in such transactions. Radian Group has guaranteed two structured transactions for Radian Guaranty involving $101.5 million of remaining credit exposure as of September 30, 2017 . |
Note 13 - Capital Stock (Notes)
Note 13 - Capital Stock (Notes) | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Stockholders' Equity Note Disclosure [Text Block] | Capital Stock Share Repurchase Program On June 29, 2016, Radian Group’s board of directors authorized a share repurchase program to spend up to $125 million to repurchase Radian Group common stock. In order to implement the program, we adopted a trading plan under Rule 10b5-1 of the Exchange Act during the third quarter of 2016. During the second quarter of 2017, 380 shares were purchased at an average price of $15.59 per share, which represented the only purchases made under the plan. This share repurchase program expired on June 30, 2017. On August 9, 2017, Radian Group’s board of directors renewed its share repurchase program that enables the Company to repurchase its common stock. The current authorization allows the Company to spend up to $50 million to repurchase Radian Group common stock in the open market or in privately negotiated transactions, based on market and business conditions, stock price and other factors. Radian has established a trading plan under Rule 10b5-1 of the Exchange Act to implement the program. As of September 30, 2017 , no shares had been purchased and therefore the full purchase authority of up to $50 million remained available under this program, which expires on July 31, 2018. Other Purchases We may purchase shares on the open market to settle stock options exercised by employees and to fund 401(k) matches and purchases under our Employee Stock Purchase Plan. In addition, upon the vesting of certain restricted stock awards under our equity compensation plans, we may withhold from such vested awards shares of our common stock to satisfy the tax liability of the award recipients. |
Note 14 - Accumulated Other Com
Note 14 - Accumulated Other Comprehensive Income | 9 Months Ended |
Sep. 30, 2017 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Income | Accumulated Other Comprehensive Income (Loss) The following table shows the rollforward of AOCI as of the periods indicated: Three Months Ended September 30, 2017 Nine Months Ended September 30, 2017 (In thousands) Before Tax Tax Effect Net of Tax Before Tax Tax Effect Net of Tax Balance at beginning of period $ 27,878 $ 9,761 $ 18,117 $ (19,063 ) $ (6,668 ) $ (12,395 ) OCI: Unrealized gains (losses) on investments: Unrealized holding gains (losses) arising during the period 9,598 3,359 6,239 52,069 18,224 33,845 Less: Reclassification adjustment for net gains (losses) included in net income (loss) (1) 170 59 111 (4,134 ) (1,447 ) (2,687 ) Net unrealized gains (losses) on investments 9,428 3,300 6,128 56,203 19,671 36,532 Net foreign currency translation adjustments 39 11 28 205 69 136 OCI 9,467 3,311 6,156 56,408 19,740 36,668 Balance at end of period $ 37,345 $ 13,072 $ 24,273 $ 37,345 $ 13,072 $ 24,273 Three Months Ended September 30, 2016 Nine Months Ended September 30, 2016 (In thousands) Before Tax Tax Effect Net of Tax Before Tax Tax Effect Net of Tax Balance at beginning of period $ 95,548 $ 33,443 $ 62,105 $ (28,425 ) $ (9,948 ) $ (18,477 ) OCI: Unrealized gains (losses) on investments: Unrealized holding gains (losses) arising during the period 10,682 3,739 6,943 133,253 46,639 86,614 Less: Reclassification adjustment for net gains (losses) included in net income (loss) (1) 5,685 1,990 3,695 3,533 1,237 2,296 Net unrealized gains (losses) on investments 4,997 1,749 3,248 129,720 45,402 84,318 Net foreign currency translation adjustments (47 ) (11 ) (36 ) (523 ) (177 ) (346 ) Net actuarial loss 240 84 156 (34 ) (12 ) (22 ) OCI 5,190 1,822 3,368 129,163 45,213 83,950 Balance at end of period $ 100,738 $ 35,265 $ 65,473 $ 100,738 $ 35,265 $ 65,473 ______________________ (1) Included in net gains (losses) on investments and other financial instruments on our consolidated statements of operations. |
Note 15 - Statutory Information
Note 15 - Statutory Information | 9 Months Ended |
Sep. 30, 2017 | |
Supplementary Insurance Information [Abstract] | |
Statutory Information | Statutory Information We prepare our statutory financial statements in accordance with the accounting practices required or permitted, if applicable, by the insurance departments of the respective states of domicile of our insurance subsidiaries. Required SAPP are established by a variety of publications of the NAIC as well as state laws, regulations and general administrative rules. In addition, insurance departments have the right to permit other specific practices that may deviate from prescribed practices. As of September 30, 2017 , we did not have any prescribed or permitted statutory accounting practices that resulted in reported statutory surplus or risk-based capital being different from what would have been reported if NAIC SAPP had been followed. State insurance regulations include various capital requirements and dividend restrictions based on our insurance subsidiaries’ statutory financial position and results of operations, as described below. Failure to maintain adequate levels of capital could lead to intervention by the various insurance regulatory authorities, which could materially and adversely affect our business, business prospects and financial condition. As of September 30, 2017 , the amount of restricted net assets held by our consolidated insurance subsidiaries (which represents our equity investment in those insurance subsidiaries) totaled $3.4 billion of our consolidated net assets. Under state insurance regulations, Radian Guaranty is required to maintain minimum surplus levels and, in certain states, a minimum Risk-to-capital ratio. The most common Statutory RBC Requirement imposed by the 16 RBC States is that a mortgage insurer’s Risk-to-capital may not exceed 25 to 1. In certain of the RBC States, a mortgage insurer must satisfy a minimum policyholder position, which is calculated based on both risk and surplus levels (“MPP Requirement”). Unless an RBC State grants a waiver or other form of relief, if a mortgage insurer is not in compliance with the Statutory RBC Requirement or MPP Requirement of that state, the mortgage insurer may be prohibited from writing new mortgage insurance business in that state. Radian Guaranty’s state of domicile, Pennsylvania, is not one of the RBC States. The statutory capital requirements for the non-RBC States are de minimis (ranging from $1 million to $5 million ); however, the insurance laws of these states generally grant broad supervisory powers to state agencies or officials to enforce rules or exercise discretion affecting almost every significant aspect of the insurance business, including the power to revoke or restrict an insurance company’s ability to write new business. Radian Guaranty was in compliance with the Statutory RBC Requirements or MPP Requirements, as applicable, in each of the RBC States as of September 30, 2017 . The NAIC is in the process of developing a new Model Act for mortgage insurers, which is expected to include, among other items, new capital adequacy requirements for mortgage insurers. In May 2016, a working group of state regulators released an exposure draft of a risk-based capital framework to establish capital requirements for mortgage insurers. While the outcome and timing of this process are uncertain, the new Model Act, if and when finalized by the NAIC, has the potential to increase capital requirements in those states that adopt the Model Act. However, we continue to believe the changes to the Model Act will not result in financial requirements that require greater capital than the level currently required under the PMIERs financial requirements. See Note 1 of Notes to Consolidated Financial Statements in our 2016 Form 10-K for information regarding the PMIERs. On March 31, 2017, we reallocated $175 million of capital, in the form of cash and marketable securities, from Radian Guaranty to Radian Reinsurance. The reallocation was accomplished by way of an extraordinary dividend, approved by the Pennsylvania Department of Insurance, from Radian Guaranty to Radian Group, and a simultaneous capital contribution from Radian Group to Radian Reinsurance in the same amount. These transactions resulted in a $175 million decrease in Radian Guaranty’s statutory policyholders’ surplus (i.e., statutory capital and surplus) and a corresponding increase in Radian Reinsurance’s statutory policyholders’ surplus. At September 30, 2017 , the statutory policyholders’ surplus of Radian Reinsurance was $332.1 million , compared to $147.6 million at December 31, 2016 . Until September 30, 2017, the reallocation of capital had no impact on Radian Guaranty’s Available Assets under the PMIERs, because Radian Reinsurance was an exclusive affiliated reinsurer of Radian Guaranty and, as such, Radian Guaranty’s Available Assets and Minimum Required Assets were determined on an aggregate basis, taking into account the assets and insured risk of Radian Guaranty and any exclusive affiliated reinsurers. However, effective in the third quarter of 2017, Radian Reinsurance is no longer considered an exclusive affiliated reinsurer of Radian Guaranty, due to its participation in the credit risk transfer programs with Fannie Mae and Freddie Mac. Although this change impacted Radian Guaranty’s Available Assets and Minimum Required Assets under the PMIERs, it did not affect Radian Guaranty’s compliance with the PMIERs financial requirements. Radian Guaranty’s Risk-to-capital calculation appears in the table below. For purposes of the Risk-to-capital calculation, as well as the Risk-to-capital requirements imposed by certain states, statutory capital is defined as the sum of statutory policyholders’ surplus plus statutory contingency reserves. September 30, December 31, ($ in millions) RIF, net (1) $ 38,712.8 $ 35,357.8 Common stock and paid-in capital $ 1,866.2 $ 2,041.0 Unassigned earnings (deficit) (740.3 ) (691.3 ) Statutory policyholders’ surplus 1,125.9 1,349.7 Contingency reserve 1,565.7 1,260.6 Statutory capital $ 2,691.6 $ 2,610.3 Risk-to-capital 14.4:1 13.5:1 ______________________ (1) Excludes risk ceded through reinsurance contracts (to third parties and affiliates) and RIF on defaulted loans. The net increase in Radian Guaranty’s Risk-to-capital in the first nine months of 2017 was primarily due to an increase in RIF without a significant change in overall statutory capital for the nine-month period. Statutory capital increased by only $81.3 million , primarily due to Radian Guaranty’s statutory net income of $337.5 million for the first nine months of 2017, partially offset by the reallocation of $175 million of capital from Radian Guaranty to Radian Reinsurance, as described above, combined with a $63.2 million net decrease in Radian Guaranty’s net admitted deferred tax assets. The Risk-to-capital ratio for our combined mortgage insurance operations was 13.4 to 1 as of September 30, 2017 , compared to 13.6 to 1 as of December 31, 2016 . |
Note 16 - Subsequent Events (No
Note 16 - Subsequent Events (Notes) | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | Subsequent Events Revolving Credit Facility O n October 16, 2017, Radian Group entered into a three-year, $225 million unsecured revolving credit facility with a syndicate of bank lenders. Borrowings under the credit facility may be used for working capital and general corporate purposes, including, without limitation, capital contributions to Radian Group’s insurance and reinsurance subsidiaries as well as growth initiatives. Terms of the credit facility include an option to increase the amount during the term of the agreement, up to a total of $300 million . 2018 Single Premium QSR Transaction In October 2017, we entered into the 2018 Single Premium QSR Transaction with a panel of eight third-party reinsurers. Under the 2018 Single Premium QSR Transaction, beginning with the business written in January 2018, we expect to cede 65% of our Single Premium NIW, subject to certain conditions and a limitation on ceded premiums written equal to $335 million for policies issued between January 1, 2018 and December 31, 2019. The parties may mutually agree to increase the amount of ceded risk above this level. Radian Guaranty will receive a 25% ceding commission for premiums ceded pursuant to this transaction. Radian Guaranty will also receive an annual profit commission based on the performance of the loans subject to the agreement, provided that the loss ratio on the subject loans is below 56% for that calendar year. Radian Guaranty may discontinue ceding new policies under the agreement at the end of any calendar quarter. Radian Guaranty also may terminate this agreement if one or both of the GSEs no longer grant full credit for the reinsurance. The agreement is scheduled to terminate on December 31, 2029. However, Radian Guaranty has the option, based on certain conditions and subject to a termination fee, to terminate the agreement as of January 1, 2022, or at the end of any calendar quarter thereafter. Termination of the agreement would result in Radian Guaranty reassuming the related RIF in exchange for a net payment from the reinsurer calculated in accordance with the terms of the agreement. The 2018 Single Premium QSR Transaction, including the terms of the agreement and the amount of credit we receive under the PMIERs financial requirements, is subject to GSE approval. We can provide no assurance if and when the GSEs may approve the 2018 Single Premium QSR Transaction, and if it is approved, whether it will be approved in its current form or on alternative terms and conditions that are acceptable to us and the third-party reinsurers. |
Note 1 - Condensed Consolidat24
Note 1 - Condensed Consolidated Financial Statements - Business Overview and Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Accounting, Policy [Policy Text Block] | Our condensed consolidated financial statements are prepared in accordance with GAAP and include the accounts of all wholly-owned subsidiaries. All intercompany accounts and transactions, and intercompany profits and losses, have been eliminated. We have condensed or omitted certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with GAAP pursuant to the instructions set forth in Article 10 of Regulation S-X of the SEC. |
Reclassification, Policy [Policy Text Block] | Certain prior period amounts have been reclassified to conform to current period presentation. |
Use of Estimates, Policy [Policy Text Block] | The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of our contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. While the amounts included in our condensed consolidated financial statements include our best estimates and assumptions, actual results may vary materially. |
Securities Borrowed and Loaned Policy [Policy Text Block] | Securities lending agreements, in which we loan certain securities in our investment portfolio to third parties for short periods of time, are treated as collateralized financing arrangements on our condensed consolidated balance sheets. In all of our securities lending agreements, the securities that we transfer to Borrowers (loaned securities) may be transferred or loaned by the Borrowers; however, we maintain effective control over all loaned securities, including: (i) retaining ownership of the securities; (ii) receiving the related investment or other income; and (iii) having the right to request the return of the loaned securities at any time. We report such securities within other assets in our condensed consolidated balance sheets. We receive cash or other securities as collateral for such loaned securities. Any cash collateral may be invested in liquid assets. Cash collateral, which is reinvested for our benefit by the intermediary in accordance with the investment guidelines contained in the securities lending and collateral agreements, is reflected in short-term investments, with an offsetting liability recognized in other liabilities for the obligation to return the cash collateral to the Borrower. Securities collateral we receive from Borrowers is held on deposit for the Borrower’s benefit and we may not transfer or loan such securities collateral unless the Borrower is in default. Therefore, such securities collateral is not reflected in our condensed consolidated financial statements given that the risks and rewards of ownership are not transferred to us from the Borrowers. See Note 5 for additional information. Fees received and paid in connection with securities lending agreements are recorded in net investment income and interest expense, respectively, on the condensed consolidated statements of operations. During the third quarter of 2017, we commenced participation in a securities lending program whereby we loan certain securities in our investment portfolio to Borrowers for short periods of time. These securities lending agreements are collateralized financing arrangements whereby we transfer securities to third parties through an intermediary in exchange for cash or other securities. In all of our securities lending agreements, the securities we transfer to Borrowers (loaned securities) may be transferred or loaned by the Borrowers; however, we maintain effective control over all loaned securities, including: (i) retaining ownership of the securities; (ii) receiving the related investment or other income; and (iii) having the right to request the return of the loaned securities at any time. Although we report such securities at fair value within other assets on our condensed consolidated balance sheets, the detailed information provided in this Note includes these securities. |
Costs Associated with Exit or Disposal Activities or Restructurings, Policy [Policy Text Block] | Restructuring and other exit costs include items such as asset impairment charges, employee severance and benefit costs, facility and lease termination costs, contract terminations and other costs of restructuring or exiting activities. The timing of the future expense and associated cash payments for restructuring and other exit costs is dependent on the type of exit cost and is expected to be completed within the next 12 months. We review assets for impairment in accordance with the accounting guidance for long-lived assets. Generally, our employee severance and benefit costs are part of the Company’s ongoing benefit arrangement and are recognized when probable and estimable. A liability for facility and lease contract termination costs is recognized at the date we cease the use of rights conveyed by the contract and is measured at its fair value, which is determined based on the remaining contractual lease rentals reduced by estimated sublease rentals. Other contract termination and exit costs include future costs that will be incurred, which are recognized in total when they no longer will benefit the Company. The liabilities for restructuring and other exit costs are recorded in other liabilities. |
Goodwill and Intangible Assets, Policy [Policy Text Block] | In performing the quantitative analysis for our goodwill impairment test as of June 30, 2017, we elected to early adopt the update to the accounting standard regarding goodwill and other intangibles, as discussed in “— Accounting Standards Adopted During 2017 ” below. This update simplifies the subsequent measurement of goodwill by eliminating step two of the goodwill impairment test. Under the new guidance, if indicators for impairment are present, we perform a quantitative analysis to evaluate our long-lived assets for potential impairment, and then determine the amount of the goodwill impairment by comparing a reporting unit’s fair value to its carrying amount. After adjusting the carrying value for any impairment of other intangibles or long-lived assets, an impairment charge is recognized for any excess of the reporting unit’s carrying amount over the reporting unit’s estimated fair value, up to the full amount of the goodwill allocated to the reporting unit. |
New Accounting Pronouncements and Changes in Accounting Principles [Text Block] | Accounting Standards Adopted During 2017. In March 2016, the FASB issued an update to the accounting standards for share-based payment transactions, including: (i) accounting for income taxes; (ii) classification of excess tax benefits on the statement of cash flows; (iii) forfeitures; (iv) minimum statutory tax withholding requirements; (v) classification of employee taxes paid on the statement of cash flows when an employer withholds shares for tax withholding purposes; (vi) the practical expedient for estimating the expected term; and (vii) intrinsic value. Among other things, the update requires: (i) all excess tax benefits and tax deficiencies to be recognized as income tax expense or benefit in the income statement as they occur; (ii) recognition of excess tax benefits, regardless of whether the benefits reduce taxes payable in the current period; and (iii) excess tax benefits to be classified along with other cash flows as an operating activity, rather than separated from other income tax cash flows as a financing activity. This update is effective for public companies for fiscal years beginning after December 15, 2016. Our adoption of this update, effective January 1, 2017, had an immaterial impact on our financial statements at implementation. As a result of implementing this new standard, however, we expect the potential for limited increased volatility in our effective tax rate and net earnings, and possible additional dilution in earnings per share calculations. In January 2017, the FASB issued an update to the accounting standard regarding goodwill and other intangibles. This update simplifies the subsequent measurement of goodwill by eliminating step two of the goodwill impairment test. Instead, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and recognize an impairment charge for any excess of the reporting unit’s carrying amount over the reporting unit’s estimated fair value, after adjusting the carrying value for any impairment of other intangibles or long-lived assets. The provisions of this update are effective for interim and annual goodwill impairment tests in fiscal years beginning after December 15, 2019, with early adoption permitted for interim or annual goodwill impairment tests performed after January 1, 2017. We elected to early adopt this update to perform the quantitative analysis for our goodwill impairment test as of June 30, 2017. See “— Other Significant Accounting Policies ” above and Note 6 for additional information. |
New Accounting Pronouncements, Policy [Policy Text Block] | Accounting Standards Not Yet Adopted. In May 2014, the FASB issued an update to the accounting standard regarding revenue recognition. In accordance with the new standard, recognition of revenue occurs when a customer obtains control of promised goods or services, in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the new standard requires that reporting companies disclose the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. This update is not expected to change revenue recognition principles related to our investments and insurance products, which combined represent a significant portion of our total revenues. This update is primarily applicable to revenues from our Services segment. In July 2015, the FASB delayed the effective date for this updated standard for public companies to interim and annual periods beginning after December 15, 2017, and subsequently issued various clarifying updates. Early adoption is permitted. This standard permits the use of either the full retrospective or the modified retrospective transition method. We currently anticipate using the modified retrospective method of adoption, with the cumulative effect of initially applying the guidance recognized at the date of adoption. We have reviewed current accounting policies and key contracts that are representative of our various products and services within the Services segment and are in the process of comparing our historical accounting policies and practices to the requirements of the new guidance. We are identifying potential differences resulting from applying the new requirements to our contracts and updating our accounting policy. While we anticipate differences in timing of revenue recognition, we do not expect the impact to be material to our financial statements. We are also in the process of evaluating new disclosure requirements and identifying appropriate changes to our business processes, systems and controls to support recognition and disclosure under the new guidance. In January 2016, the FASB issued an update that makes certain changes to the standard for the accounting of financial instruments. Among other things, the update requires: (i) equity investments to be measured at fair value with changes in fair value recognized in net income (loss); (ii) the use of the exit price notion when measuring the fair value of financial instruments for disclosure purposes; (iii) separate presentation of financial assets and financial liabilities by measurement category and form of financial asset; and (iv) separate presentation in other comprehensive income of the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk (also referred to as “own credit”) when the organization has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. The update also eliminates the requirement to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet. This update is effective for public companies for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is not permitted, with the exception of the “own credit” provision. We are currently evaluating the impact to our financial statements and future disclosures as a result of this update. In February 2016, the FASB issued an update that replaces the existing accounting and disclosure requirements for leases of property, plant and equipment. The update requires lessees to recognize, as of the lease commencement date, assets and liabilities for all leases with lease terms of more than 12 months, which is a change from the current GAAP requirement to recognize only capital leases on the balance sheet. Pursuant to the new standard, the liability initially recognized for the lease obligation is equal to the present value of the lease payments not yet made, discounted over the lease term at the implicit interest rate of the lease, if available, or otherwise at the lessee’s incremental borrowing rate. The lessee is also required to recognize an asset for its right to use the underlying asset for the lease term, based on the liability subject to certain adjustments, such as for initial direct costs. Leases are required to be classified as either operating or finance, with expense on operating leases recorded as a single lease cost on a straight-line basis. For finance leases, interest expense on the lease liability is required to be recognized separately from the straight-line amortization of the right-of-use asset. Quantitative disclosures are required for certain items, including the cost of leases, the weighted-average remaining lease term, the weighted-average discount rate and a maturity analysis of lease liabilities. Additional qualitative disclosures are also required regarding the nature of the leases, such as basis, terms and conditions of: (i) variable interest payments; (ii) extension and termination options; and (iii) residual value guarantees. This update is effective for public companies for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. The new standard must be adopted by applying the new guidance as of the beginning of the earliest comparative period presented, using a modified retrospective transition approach with certain optional practical expedients. We are currently evaluating the impact to our financial statements and future disclosures as a result of this update. In June 2016, the FASB issued an update to the accounting standard regarding the measurement of credit losses on financial instruments. This update requires that financial assets measured at their amortized cost basis be presented at the net amount expected to be collected. Credit losses relating to available-for-sale debt securities are to be recorded through an allowance for credit losses, rather than a write-down of the asset, with the amount of the allowance limited to the amount by which fair value is less than amortized cost. This update is effective for public companies for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. We are currently evaluating the impact to our financial statements and future disclosures as a result of this update. In October 2016, the FASB issued an update to the accounting standard regarding the accounting for income taxes. This update requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. This update will be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. This update is effective for public companies for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted, including adoption in the first interim period of the adoption year. We have concluded there is currently no impact to our financial statements and future disclosures as a result of this update. In March 2017, the FASB issued an update to the accounting standard regarding receivables. The new standard requires certain premiums on purchased callable debt securities to be amortized to the earliest call date. The amortization period for callable debt securities purchased at a discount will not be impacted. The provisions of this update are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. We are currently evaluating the impact to our financial statements and future disclosures as a result of this update. |
Segment Reporting, Policy [Policy Text Block] | We have two strategic business units that we manage separately—Mortgage Insurance and Services. Adjusted pretax operating income (loss) for each segment represents segment results on a standalone basis; therefore, inter-segment eliminations and reclassifications required for consolidated GAAP presentation have not been reflected. In the fourth quarter of 2016, we completed an organizational change that resulted in a change to our segment financial reporting structure. Previously, contract underwriting activities on behalf of third parties were reported in either the Mortgage Insurance segment or the Services segment, based on the customer relationship. Management responsibility for this contract underwriting business was moved entirely to the Services segment. This organizational change resulted in the reclassification to the Services segment of revenue and expenses for all contract underwriting performed on behalf of third parties. This change aligns with changes in personnel reporting lines and management oversight, and is consistent with the way the chief operating decision maker began assessing the performance of the reportable segments in the fourth quarter of 2016. The amounts reclassified did not have a material impact on adjusted pretax operating income. As a result, on a segment basis, Services revenue, cost of services and other operating expenses have increased, with offsetting reductions in Mortgage Insurance other income and other operating expenses. This change has been reflected in our segment operating results. Mortgage Insurance underwriting continues to be reported as an expense in the Mortgage Insurance segment. We include underwriting-related expenses for mortgage insurance, based on a pro-rata volume of mortgage applications excluding third-party contract underwriting services, in our Mortgage Insurance segment’s other operating expenses before corporate allocations. We include underwriting-related expenses for third-party contract underwriting services, based on a pro-rata volume of mortgage applications, in our Services segment’s cost of services and other operating expenses before corporate allocations, as applicable. We allocate to our Mortgage Insurance segment: (i) corporate expenses based on an allocated percentage of time spent on the Mortgage Insurance segment; (ii) all interest expense except for interest expense on the original principal balance of $300 million from the Senior Notes due 2019 that were issued to fund our purchase of Clayton; and (iii) all corporate cash and investments. We allocate to our Services segment: (i) corporate expenses based on an allocated percentage of time spent on the Services segment and (ii) as noted above, allocated interest expense based on the original amount of debt issued to fund our purchase of Clayton. No material corporate cash or investments are allocated to the Services segment. Inter-segment activities are recorded at market rates for segment reporting and eliminated in consolidation. |
Fair Value of Financial Instruments, Policy [Policy Text Block] | In accordance with GAAP, we established a three-level valuation hierarchy for disclosure of fair value measurements based on the transparency of inputs to the valuation of an asset or liability as of the measurement date. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level I measurements) and the lowest priority to unobservable inputs (Level III measurements). The level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the measurement in its entirety. The three levels of the fair value hierarchy are defined below: Level I — Unadjusted quoted prices for identical assets or liabilities in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level II — Prices or valuations based on observable inputs other than quoted prices in active markets for identical assets and liabilities; and Level III — Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. Level III inputs are used to measure fair value only to the extent that observable inputs are not available. The level of market activity used to determine the fair value hierarchy is based on the availability of observable inputs market participants would use to price an asset or a liability, including market value price observations. |
Income Tax, Policy [Policy Text Block] | As required under the accounting standard regarding accounting for income taxes, our deferred tax assets (“DTAs”) and deferred tax liabilities (“DTLs”) are recognized under the balance sheet method, which recognizes the future tax effect of temporary differences between the amounts recorded in our financial statements and the tax bases of these amounts. DTAs and DTLs are measured using the enacted tax rates expected to apply to taxable income in the periods in which the DTA or DTL is expected to be realized or settled. Our provision for income taxes for interim financial periods is based on an estimate of our annual effective tax rate for the full year. When estimating our full year 2017 and 2016 annual effective tax rates, we accounted for discrete items at the federal applicable tax rate, including: (i) the tax effects of gains and losses on our investments; (ii) excess tax benefits or deficiencies realized in 2017 from employee share-based payments; (iii) return-to-provision adjustments; (iv) prior year items relating to the accounting for uncertainty in income taxes; (v) the impairments of goodwill and other intangible assets in 2017; and (vi) certain other adjustments. We are required to establish a valuation allowance against our DTAs when it is more likely than not that all or some portion of our DTAs will not be realized. At each balance sheet date, we assess our need for a valuation allowance. Our assessment is based on all available evidence, both positive and negative. This requires management to exercise judgment and make assumptions regarding whether our DTAs will be realized in future periods. |
Note 2 - Net Income Per Share (
Note 2 - Net Income Per Share (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | The calculation of basic and diluted net income per share was as follows: Three Months Ended Nine Months Ended (In thousands, except per-share amounts) 2017 2016 2017 2016 Net income—basic $ 65,142 $ 82,803 $ 114,272 $ 247,164 Adjustment for dilutive Convertible Senior Notes due 2019, net of tax (1) — 848 (215 ) 5,151 Net income—diluted $ 65,142 $ 83,651 $ 114,057 $ 252,315 Average common shares outstanding—basic 215,279 214,387 215,194 210,858 Dilutive effect of Convertible Senior Notes due 2017 (2) 16 178 398 71 Dilutive effect of Convertible Senior Notes due 2019 — 8,274 611 16,897 Dilutive effect of share-based compensation arrangements (2) 4,096 3,129 4,027 2,846 Adjusted average common shares outstanding—diluted 219,391 225,968 220,230 230,672 Net income per share: Basic $ 0.30 $ 0.39 $ 0.53 $ 1.17 Diluted $ 0.30 $ 0.37 $ 0.52 $ 1.09 ______________________ (1) As applicable, includes coupon interest, amortization of discount and fees, and other changes in income that would result from the assumed conversion. Included in the nine months ended September 30, 2017 is a benefit related to our adjustment of estimated accrued expense to actual amounts, resulting from the January 2017 settlement of our obligations on the remaining Convertible Senior Notes due 2019. (2) The following number of shares of our common stock equivalents issued under our share-based compensation arrangements and our convertible debt were not included in the calculation of diluted net income per share because they were anti-dilutive: Three Months Ended Nine Months Ended (In thousands) 2017 2016 2017 2016 Shares of common stock equivalents 676 1,045 440 1,045 Shares of Convertible Senior Notes due 2017 — — — 1,902 |
Note 3 - Segment Reporting (Tab
Note 3 - Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment [Table Text Block] | Summarized operating results for our segments as of and for the periods indicated, are as follows: Three Months Ended Nine Months Ended (In thousands) 2017 2016 (1) 2017 2016 (1) Mortgage Insurance Net premiums written—insurance (2) $ 247,810 $ 240,999 $ 713,782 $ 499,662 (Increase) decrease in unearned premiums (11,108 ) (2,850 ) (26,184 ) 188,522 Net premiums earned—insurance 236,702 238,149 687,598 688,184 Net investment income 32,540 28,430 93,643 84,470 Other income 760 716 2,118 2,836 Total (3) 270,002 267,295 783,359 775,490 Provision for losses 35,980 56,151 100,926 149,500 Policy acquisition costs 5,554 6,119 18,406 17,901 Other operating expenses before corporate allocations 36,941 35,940 114,169 102,851 Total (4) 78,475 98,210 233,501 270,252 Adjusted pretax operating income before corporate allocations 191,527 169,085 549,858 505,238 Allocation of corporate operating expenses 11,737 11,911 41,817 35,526 Allocation of interest expense 11,282 15,360 34,539 50,596 Adjusted pretax operating income $ 168,508 $ 141,814 $ 473,502 $ 419,116 ______________________ (1) Reflects changes made during the fourth quarter of 2016 to align our segment reporting structure concurrent with changes in personnel reporting lines and management oversight related to contract underwriting performed on behalf of third parties. Revenue and expenses for this business are now reflected in the Services segment. As a result, Services revenue, cost of services and other operating expenses have increased, with offsetting reductions in Mortgage Insurance other income and other operating expenses. (2) Net of ceded premiums written under the QSR Transactions and the Single Premium QSR Transaction. See Note 7 for additional information. (3) Excludes net gains on investments and other financial instruments of $2.5 million and $5.0 million , respectively, for the three and nine months ended September 30, 2017 , and net gains on investments and other financial instruments of $7.7 million and $69.5 million , respectively, for the three and nine months ended September 30, 2016 , not included in adjusted pretax operating income. (4) Includes inter-segment expenses as follows: Three Months Ended Nine Months Ended (In thousands) 2017 2016 2017 2016 Inter-segment expenses $ 1,491 $ 2,156 $ 5,726 $ 5,702 Three Months Ended Nine Months Ended (In thousands) 2017 2016 (1) 2017 2016 (1) Services Services revenue (2) $ 41,062 $ 48,033 $ 121,126 $ 124,691 Cost of services 27,544 29,655 82,196 81,239 Other operating expenses before corporate allocations 12,781 13,575 38,188 40,973 Restructuring and other exit costs (3) 5,463 — 5,463 — Total 45,788 43,230 125,847 122,212 Adjusted pretax operating income (loss) before corporate allocations (4,726 ) 4,803 (4,721 ) 2,479 Allocation of corporate operating expenses 3,730 2,265 10,852 6,795 Allocation of interest expense 4,433 4,423 13,293 13,267 Adjusted pretax operating income (loss) $ (12,889 ) $ (1,885 ) $ (28,866 ) $ (17,583 ) ______________________ (1) Reflects changes made during the fourth quarter of 2016 to align our segment reporting structure concurrent with changes in personnel reporting lines and management oversight related to contract underwriting performed on behalf of third parties. Revenue and expenses for this business are now reflected in the Services segment. As a result, Services revenue, cost of services and other operating expenses have increased, with offsetting reductions in Mortgage Insurance other income and other operating expenses. (2) Includes inter-segment revenues as follows: Three Months Ended Nine Months Ended (In thousands) 2017 2016 2017 2016 Inter-segment revenues $ 1,491 $ 2,156 $ 5,726 $ 5,702 (3) Primarily includes employee severance and related benefit costs. Does not include impairment of long-lived assets, which is not considered a component of adjusted pretax operating income. Selected balance sheet information for our segments, as of the periods indicated, is as follows: At September 30, 2017 (In thousands) Mortgage Insurance Services (1) Total Total assets $ 5,630,687 $ 213,586 $ 5,844,273 At December 31, 2016 (In thousands) Mortgage Insurance Services Total Total assets $ 5,506,338 $ 356,836 $ 5,863,174 ______________________ (1) The decrease in total assets for the Services segment at September 30, 2017, as compared to December 31, 2016, is primarily due to the impairment of goodwill and other intangible assets. See Note 6 for further details. |
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Table Text Block] | The reconciliation of adjusted pretax operating income to consolidated pretax income (loss) is as follows: Three Months Ended Nine Months Ended (In thousands) 2017 2016 2017 2016 Adjusted pretax operating income (loss): Mortgage Insurance (1) $ 168,508 $ 141,814 $ 473,502 $ 419,116 Services (1) (12,889 ) (1,885 ) (28,866 ) (17,583 ) Total adjusted pretax operating income 155,619 139,929 444,636 401,533 Net gains (losses) on investments and other financial instruments 2,480 7,711 4,960 69,524 Loss on induced conversion and debt extinguishment (45,766 ) (17,397 ) (51,469 ) (75,075 ) Acquisition-related expenses (2) (54 ) (10 ) (126 ) (161 ) Impairment of goodwill — — (184,374 ) — Amortization and impairment of other intangible assets (2,890 ) (3,292 ) (25,042 ) (9,931 ) Impairment of other long-lived assets (3) (6,575 ) — (6,575 ) — Consolidated pretax income $ 102,814 $ 126,941 $ 182,010 $ 385,890 ______________________ (1) Includes inter-segment expenses and revenues as listed in the notes to the preceding tables. (2) Acquisition-related expenses represent expenses incurred to effect the acquisition of a business, net of adjustments to accruals previously recorded for acquisition expenses. (3) Included within restructuring and other exit costs. See Note 1. |
Note 4 - Fair Value of Financ27
Note 4 - Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] | The following is a list of assets that are measured at fair value by hierarchy level as of September 30, 2017 : (In thousands) Level I Level II Total Assets at Fair Value Investment Portfolio: U.S. government and agency securities $ 137,606 $ 12,217 $ 149,823 State and municipal obligations — 385,486 385,486 Money market instruments 155,957 — 155,957 Corporate bonds and notes — 2,291,267 2,291,267 RMBS — 207,150 207,150 CMBS — 495,229 495,229 Other ABS — 620,441 620,441 Foreign government and agency securities — 36,684 36,684 Equity securities 187,642 860 188,502 Other investments (1) — 39,620 39,620 Total Investments at Fair Value (2) 481,205 4,088,954 4,570,159 Total Assets at Fair Value $ 481,205 $ 4,088,954 $ 4,570,159 ______________________ (1) Comprising short-term certificates of deposit and commercial paper. (2) Does not include certain other invested assets ( $0.6 million ), primarily invested in limited partnerships, accounted for as cost-method investments and not measured at fair value. Also does not include cash collateral held under securities lending agreements reinvested in short-term investments, and includes securities loaned to third-party borrowers under securities lending agreements. The following is a list of assets that are measured at fair value by hierarchy level as of December 31, 2016 : (In thousands) Level I Level II Level III Total Assets at Fair Value Investment Portfolio: U.S. government and agency securities $ 237,479 $ — $ — $ 237,479 State and municipal obligations — 358,536 — 358,536 Money market instruments 431,472 — — 431,472 Corporate bonds and notes — 2,024,205 — 2,024,205 RMBS — 388,842 — 388,842 CMBS — 507,273 — 507,273 Other ABS — 450,128 — 450,128 Foreign government and agency securities — 32,807 — 32,807 Equity securities — 830 500 1,330 Other investments (1) — 28,663 500 29,163 Total Investments at Fair Value (2) 668,951 3,791,284 1,000 4,461,235 Total Assets at Fair Value $ 668,951 $ 3,791,284 $ 1,000 $ 4,461,235 ______________________ (1) Comprising short-term certificates of deposit and commercial paper, included within Level II, and convertible notes of non-public company issuers, included within Level III. (2) Does not include certain other invested assets ( $1.2 million ), primarily invested in limited partnerships, accounted for as cost-method investments and not measured at fair value. |
Fair Value, by Balance Sheet Grouping [Table Text Block] | The carrying value and estimated fair value of other selected assets and liabilities not carried at fair value on our condensed consolidated balance sheets were as follows as of the dates indicated: September 30, 2017 December 31, 2016 (In thousands) Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Assets: Other invested assets $ 599 $ 3,404 $ 1,195 $ 3,789 Liabilities: Long-term debt 1,026,806 1,095,409 1,069,537 1,214,471 |
Note 5 - Investments (Tables)
Note 5 - Investments (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Investments [Abstract] | |
Schedule of Securities Financing Transactions [Table Text Block] | Key components of our securities lending agreements at September 30, 2017 consisted of the following: (In thousands) September 30, Loaned securities: (1) Corporate bonds and notes $ 33,557 Foreign government and agency securities 120 Equity securities 27,199 Total loaned securities, at fair value $ 60,876 Total loaned securities, at amortized cost $ 60,740 Securities collateral on deposit from Borrowers (2) 25,589 Reinvested cash collateral, at estimated fair value (3) 36,782 ______________________ (1) Our securities loaned under securities lending agreements are included at fair value within other assets on our condensed consolidated balance sheets. All of our securities lending agreements are classified as overnight and continuous. None of the amounts are subject to offsetting. (2) Securities collateral on deposit with us from Borrowers may not be transferred or re-pledged unless the Borrower is in default, and is therefore not reflected in our condensed consolidated financial statements. (3) All cash collateral received has been reinvested in accordance with the securities lending and collateral agreements and is included in short-term investments. Amounts payable on the return of cash collateral under securities lending agreements are included within other liabilities on our condensed consolidated balance sheets. |
Unrealized Gain (Loss) on Investments [Table Text Block] | Our available for sale securities within our investment portfolio consisted of the following as of the dates indicated: September 30, 2017 (In thousands) Amortized Cost Fair Value Gross Unrealized Gains Gross Unrealized Losses Fixed-maturities available for sale: U.S. government and agency securities $ 61,287 $ 60,860 $ 187 $ 614 State and municipal obligations 125,485 129,507 4,461 439 Corporate bonds and notes 1,806,796 1,836,316 34,927 5,407 RMBS 176,789 175,408 796 2,177 CMBS 433,916 436,892 4,167 1,191 Other ABS 616,687 618,832 2,627 482 Foreign government and agency securities 31,437 32,392 961 6 Total fixed-maturities available for sale (1) 3,252,397 3,290,207 48,126 10,316 Equity securities available for sale (1) (2) 188,065 188,502 937 500 Total debt and equity securities $ 3,440,462 $ 3,478,709 $ 49,063 $ 10,816 ______________________ (1) Includes loaned securities under securities lending agreements that are classified as other assets in our condensed consolidated balance sheets, as further described below. (2) Primarily consists of investments in fixed income and equity exchange-traded funds and publicly-traded business development company equities. December 31, 2016 (In thousands) Amortized Cost Fair Value Gross Unrealized Gains Gross Unrealized Losses Fixed-maturities available for sale: U.S. government and agency securities $ 78,931 $ 75,474 $ 2 $ 3,459 State and municipal obligations 66,124 67,171 1,868 821 Corporate bonds and notes 1,463,720 1,455,628 14,320 22,412 RMBS 358,262 350,628 197 7,831 CMBS 429,057 428,289 2,255 3,023 Other ABS 433,603 434,728 2,037 912 Foreign government and agency securities 24,771 24,594 148 325 Other investments 2,000 2,000 — — Total fixed-maturities available for sale 2,856,468 2,838,512 20,827 38,783 Equity securities available for sale (1) 1,330 1,330 — — Total debt and equity securities $ 2,857,798 $ 2,839,842 $ 20,827 $ 38,783 ______________________ (1) Primarily consists of investments in Federal Home Loan Bank stock as required in connection with the memberships of Radian Guaranty and Radian Reinsurance in the FHLB. |
Schedule Of Unrealized Losses [Table Text Block] | The following tables show the gross unrealized losses and fair value of our securities deemed “available for sale” aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, as of the dates indicated. Included in the amounts as of September 30, 2017 , are loaned securities under securities lending agreements that are classified as other assets in our condensed consolidated balance sheets, as further described below. September 30, 2017 ( $ in thousands ) Description of Securities Less Than 12 Months 12 Months or Greater Total # of securities Fair Value Unrealized Losses # of securities Fair Value Unrealized Losses # of securities Fair Value Unrealized Losses U.S. government and agency securities 8 $ 37,926 $ 604 2 $ 1,580 $ 10 10 $ 39,506 $ 614 State and municipal obligations 17 60,210 439 — — — 17 60,210 439 Corporate bonds and notes 108 439,016 5,104 5 11,013 303 113 450,029 5,407 RMBS 29 114,243 1,862 5 14,262 315 34 128,505 2,177 CMBS 30 122,980 1,009 3 1,811 182 33 124,791 1,191 Other ABS 64 174,128 478 1 1,484 4 65 175,612 482 Foreign government and agency securities 2 1,196 6 — — — 2 1,196 6 Equity securities 11 79,856 500 — — — 11 79,856 500 Total 269 $ 1,029,555 $ 10,002 16 $ 30,150 $ 814 285 $ 1,059,705 $ 10,816 December 31, 2016 ( $ in thousands ) Description of Securities Less Than 12 Months 12 Months or Greater Total # of securities Fair Value Unrealized Losses # of securities Fair Value Unrealized Losses # of securities Fair Value Unrealized Losses U.S. government and agency securities 7 $ 73,160 $ 3,459 — $ — $ — 7 $ 73,160 $ 3,459 State and municipal obligations 7 30,901 821 — — — 7 30,901 821 Corporate bonds and notes 185 788,876 22,135 2 4,582 277 187 793,458 22,412 RMBS 56 311,031 7,822 1 1,398 9 57 312,429 7,831 CMBS 37 218,170 2,909 2 6,585 114 39 224,755 3,023 Other ABS 58 131,268 470 16 45,886 442 74 177,154 912 Foreign government and agency securities 12 13,034 325 — — — 12 13,034 325 Total 362 $ 1,566,440 $ 37,941 21 $ 58,451 $ 842 383 $ 1,624,891 $ 38,783 |
Trading Securities (and Certain Trading Assets) [Table Text Block] | The trading securities within our investment portfolio, which are recorded at fair value, consisted of the following as of the dates indicated: (In thousands) September 30, December 31, Trading securities: U.S. government and agency securities $ — $ 33,042 State and municipal obligations 214,599 259,573 Corporate bonds and notes 327,306 453,617 RMBS 31,742 38,214 CMBS 58,337 78,984 Other ABS — 8,219 Foreign government and agency securities 4,292 8,213 Total $ 636,276 (1) $ 879,862 ______________________ (1) Includes loaned securities under securities lending agreements that are classified as other assets in our condensed consolidated balance sheets, as further described below. |
Gain (Loss) on Investments [Table Text Block] | Net realized and unrealized gains (losses) on investments and other financial instruments consisted of: Three Months Ended Nine Months Ended September 30, (In thousands) 2017 2016 2017 2016 Net realized gains (losses): Fixed-maturities available for sale $ 137 $ 5,685 $ (3,552 ) $ 3,703 Equity securities available for sale 33 — 418 (170 ) Trading securities (223 ) 1,524 (6,266 ) (295 ) Short-term investments 14 38 (18 ) (1 ) Other invested assets — 631 — 631 Other gains (losses) 7 15 25 33 Net realized gains (losses) on investments (32 ) 7,893 (9,393 ) 3,901 Other-than-temporary impairment losses — — (1,000 ) — Unrealized gains (losses) on trading securities 2,353 (47 ) 14,517 62,862 Total net gains (losses) on investments 2,321 7,846 4,124 66,763 Net gains (losses) on other financial instruments 159 (135 ) 836 2,761 Net gains (losses) on investments and other financial instruments $ 2,480 $ 7,711 $ 4,960 $ 69,524 |
Investments Classified by Contractual Maturity Date [Table Text Block] | The contractual maturities of fixed-maturity investments were as follows: September 30, 2017 Available for Sale (In thousands) Amortized Cost Fair Value Due in one year or less (1) $ 41,767 $ 41,780 Due after one year through five years (1) 687,822 694,932 Due after five years through 10 years (1) 965,360 974,600 Due after 10 years (1) 330,056 347,763 RMBS (2) 176,789 175,408 CMBS (2) 433,916 436,892 Other ABS (2) 616,687 618,832 Total (3) $ 3,252,397 $ 3,290,207 ______________________ (1) Actual maturities may differ as a result of calls before scheduled maturity. (2) RMBS, CMBS and Other ABS are shown separately, as they are not due at a single maturity date. (3) Includes securities loaned under securities lending agreements. |
Note 6 - Goodwill and Other I29
Note 6 - Goodwill and Other Intangible Assets, Net (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill [Table Text Block] | All of our goodwill and other intangible assets relate to our Services segment. The following table shows the changes in the carrying amount of goodwill for the year-to-date periods ended September 30, 2017 and December 31, 2016 : (In thousands) Goodwill Accumulated Impairment Losses Net Balance at December 31, 2015 $ 197,265 $ (2,095 ) $ 195,170 Goodwill acquired — — — Impairment losses — — — Balance at December 31, 2016 197,265 (2,095 ) 195,170 Goodwill acquired 126 — 126 Impairment losses — (184,374 ) (184,374 ) Balance at September 30, 2017 $ 197,391 $ (186,469 ) $ 10,922 |
Schedule of Finite-Lived Intangible Assets [Table Text Block] | The following is a summary of the gross and net carrying amounts and accumulated amortization of our other intangible assets as of the periods indicated: September 30, 2017 (In thousands) Original Amount Acquired Accumulated Amortization and Impairment Net Carrying Amount Client relationships (1) $ 83,363 $ (40,625 ) $ 42,738 Technology (2) 15,250 (8,382 ) 6,868 Trade name and trademarks 8,340 (2,787 ) 5,553 Client backlog 6,680 (5,813 ) 867 Non-competition agreements 185 (166 ) 19 Total $ 113,818 $ (57,773 ) $ 56,045 ______________________ (1) Includes an impairment charge of $14.9 million . (2) Includes an impairment charge of $0.9 million . December 31, 2016 (In thousands) Original Amount Acquired Accumulated Amortization Net Carrying Amount Client relationships $ 83,316 $ (19,696 ) $ 63,620 Technology 15,250 (5,497 ) 9,753 Trade name and trademarks 8,340 (2,125 ) 6,215 Client backlog 6,680 (5,235 ) 1,445 Non-competition agreements 185 (160 ) 25 Total $ 113,771 $ (32,713 ) $ 81,058 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | The estimated aggregate amortization expense for the remainder of 2017 and thereafter is as follows (in thousands): 2017 $ 2,754 2018 10,316 2019 8,790 2020 7,412 2021 5,834 2022 5,081 Thereafter 15,858 Total $ 56,045 |
Note 7 - Reinsurance (Tables)
Note 7 - Reinsurance (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Reinsurance Disclosures [Abstract] | |
Reinsurance, Premiums Written And Earned [Table Text Block] | The effect of reinsurance on net premiums written and earned is as follows: Three Months Ended Nine Months Ended (In thousands) 2017 2016 2017 2016 Net premiums written—insurance: Direct $ 265,927 $ 261,456 $ 766,219 $ 748,110 Ceded (1) (18,117 ) (20,457 ) (52,437 ) (248,448 ) Net premiums written—insurance $ 247,810 $ 240,999 $ 713,782 $ 499,662 Net premiums earned—insurance: Direct $ 250,541 $ 258,074 $ 729,832 $ 747,342 Assumed 7 9 21 27 Ceded (1) (13,846 ) (19,934 ) (42,255 ) (59,185 ) Net premiums earned—insurance $ 236,702 $ 238,149 $ 687,598 $ 688,184 ______________________ (1) Net of profit commission. |
Reinsurance Transaction Details [Table Text Block] | The following tables show the amounts related to the QSR Transactions and the Single Premium QSR Transaction for the periods indicated: QSR Transactions Three Months Ended Nine Months Ended (In thousands) 2017 2016 2017 2016 Ceded premiums written (1) $ 4,621 $ 6,730 $ 15,137 $ 22,048 Ceded premiums earned (1) 6,826 10,597 22,064 33,094 Ceding commissions written 1,323 1,922 4,328 6,291 Ceding commissions earned (2) 2,925 3,974 10,198 12,199 Ceded losses, net 257 495 517 1,259 Single Premium QSR Transaction Three Months Ended Nine Months Ended (In thousands) 2017 2016 2017 2016 Ceded premiums written (1) $ 13,248 $ 13,004 $ 36,064 $ 222,085 (3) Ceded premiums earned (1) 6,771 8,608 18,941 21,748 Ceding commissions written 5,156 5,482 14,002 61,258 Ceding commissions earned (2) 3,536 4,382 9,721 11,173 Ceded losses 406 719 1,443 1,635 ______________________ (1) Net of profit commission. (2) Includes amounts reported in policy acquisition costs and other operating expenses. (3) Includes ceded premiums for policies written in prior periods. See Note 8 of Notes to Consolidated Financial Statements in our 2016 Form 10-K. |
Note 8 - Other Assets (Tables)
Note 8 - Other Assets (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Other Assets [Abstract] | |
Schedule of Other Assets [Table Text Block] | The following table shows the components of other assets as of the dates indicated: (In thousands) September 30, December 31, Deposit with the IRS (Note 9) $ 88,557 $ 88,557 Property and equipment (1) (2) 88,119 70,665 Corporate-owned life insurance 85,699 83,248 Loaned securities 60,876 — Accrued investment income 31,390 29,255 Deferred policy acquisition costs 15,816 14,127 Reinsurance recoverables 7,605 7,368 Other 60,954 50,615 Total other assets $ 439,016 $ 343,835 ______________________ (1) Property and equipment at cost, less accumulated depreciation of $101.7 million and $118.5 million at September 30, 2017 and December 31, 2016 , respectively. Depreciation expense was $4.6 million and $2.9 million for the three-month periods ended September 30, 2017 and 2016 , respectively, and $12.8 million and $7.6 million for the nine-month periods ended September 30, 2017 and 2016 , respectively. (2) Includes $45.0 million and $49.7 million at September 30, 2017 and December 31, 2016 , respectively, related to our technology upgrade project and $15.7 million at September 30, 2017 of leasehold improvements related to our new corporate headquarters. |
Note 10 - Losses and LAE (Table
Note 10 - Losses and LAE (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Insurance Loss Reserves [Abstract] | |
Schedule of Liability for Future Policy Benefits, by Product Segment [Table Text Block] | The following table shows our reserve for losses and LAE by category at the end of each period indicated: (In thousands) September 30, December 31, Reserves for losses by category: Prime $ 296,885 $ 379,845 Alt-A 112,033 148,006 A minus and below 78,048 101,653 IBNR and other (1) 13,085 71,107 LAE 14,687 18,630 Reinsurance recoverable (2) 7,445 6,816 Total primary reserves 522,183 726,057 Pool 18,630 31,853 IBNR and other 14,576 673 LAE 550 932 Reinsurance recoverable (2) 25 35 Total pool reserves 33,781 33,493 Total First-lien reserves 555,964 759,550 Other (3) 524 719 Total reserve for losses $ 556,488 $ 760,269 ______________________ (1) At December 31, 2016, primarily related to expected payments under the Freddie Mac Agreement. During the third quarter of 2017, the scheduled final settlement date under the Freddie Mac Agreement occurred and therefore, except for loans with loss mitigation and claims activity already in process, most of the loans subject to the Freddie Mac Agreement were removed from RIF and IIF because the insurance no longer remains in force. See “—Freddie Mac Agreement,” below for additional information. (2) Represents ceded losses on captive reinsurance transactions, the QSR Transactions and the Single Premium QSR Transaction. (3) Does not include our Second-lien premium deficiency reserve that is included in other liabilities. |
Schedule of Liability for Unpaid Claims and Claims Adjustment Expense [Table Text Block] | The following table presents information relating to our reserve for losses, including our IBNR reserve and LAE but excluding our Second-lien premium deficiency reserve, for the periods indicated: Nine Months Ended (In thousands) 2017 2016 Balance at beginning of period $ 760,269 $ 976,399 Less: Reinsurance recoverables (1) 6,851 8,286 Balance at beginning of period, net of reinsurance recoverables 753,418 968,113 Add: Losses and LAE incurred in respect of default notices reported and unreported in: Current year (2) 145,798 152,320 Prior years (45,331 ) (3,906 ) Total incurred 100,467 148,414 Deduct: Paid claims and LAE related to: Current year (2) 3,639 2,725 Prior years 301,228 298,352 Total paid 304,867 (3) 301,077 Balance at end of period, net of reinsurance recoverables 549,018 815,450 Add: Reinsurance recoverables (1) 7,470 6,484 Balance at end of period $ 556,488 $ 821,934 ______________________ (1) Related to ceded losses recoverable, if any, on captive reinsurance transactions, the QSR Transactions and the Single Premium QSR Transaction. See Note 7 for additional information. (2) Related to underlying defaulted loans with a most recent default notice dated in the year indicated. For example, if a loan had defaulted in a prior year, but then subsequently cured and later re-defaulted in the current year, that default would be considered a current year default. (3) Includes the payment of $54.8 million made in connection with the scheduled final settlement of the Freddie Mac Agreement in the third quarter of 2017. |
Note 11 - Long-Term Debt (Table
Note 11 - Long-Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Long-term Debt, Unclassified [Abstract] | |
Schedule of Long-term Debt Instruments [Table Text Block] | The carrying value of our long-term debt at September 30, 2017 and December 31, 2016 was as follows: (In thousands) September 30, December 31, 5.500% Senior Notes due 2019 $ 157,470 $ 296,907 5.250% Senior Notes due 2020 231,618 345,308 7.000% Senior Notes due 2021 194,974 344,362 4.500% Senior Notes due 2024 442,223 — 3.000% Convertible Senior Notes due 2017 521 20,947 2.250% Convertible Senior Notes due 2019 — 62,013 Total long-term debt $ 1,026,806 $ 1,069,537 |
Convertible Debt | The convertible notes are reflected on our condensed consolidated balance sheets as follows: Convertible Senior Notes due 2017 Convertible Senior Notes due 2019 (In thousands) September 30, December 31, September 30, December 31, Liability component: Principal $ 526 $ 22,233 $ — $ 68,024 Debt discount, net (1) (5 ) (1,221 ) — (5,461 ) Debt issuance costs (1) — (65 ) — (550 ) Net carrying amount $ 521 $ 20,947 $ — $ 62,013 ______________________ (1) Included within long-term debt and is being amortized over the life of the convertible notes. The following tables set forth total interest expense recognized related to the convertible notes for the periods indicated: Convertible Senior Notes due 2017 Three Months Ended Nine Months Ended (In thousands) 2017 2016 2017 2016 Contractual interest expense (benefit) (1) $ 4 $ 166 $ 312 $ 705 Amortization of debt issuance costs — 17 32 71 Amortization of debt discount 10 322 615 1,344 Total interest expense (benefit) (1) $ 14 $ 505 $ 959 $ 2,120 ______________________ (1) Interest expense (benefit) represents expense incurred, net of adjustments to accruals previously recorded. Convertible Senior Notes due 2019 Three Months Ended Nine Months Ended (In thousands) 2017 2016 2017 2016 Contractual interest expense (benefit) (1) $ — $ 493 $ (510 ) $ 3,043 Amortization of debt issuance costs — 74 16 447 Amortization of debt discount — 737 163 4,434 Total interest expense (benefit) (1) $ — $ 1,304 $ (331 ) $ 7,924 ______________________ (1) Interest expense (benefit) represents expense incurred, net of adjustments to accruals previously recorded. |
Note 14 - Accumulated Other C34
Note 14 - Accumulated Other Comprehensive Income (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block] | The following table shows the rollforward of AOCI as of the periods indicated: Three Months Ended September 30, 2017 Nine Months Ended September 30, 2017 (In thousands) Before Tax Tax Effect Net of Tax Before Tax Tax Effect Net of Tax Balance at beginning of period $ 27,878 $ 9,761 $ 18,117 $ (19,063 ) $ (6,668 ) $ (12,395 ) OCI: Unrealized gains (losses) on investments: Unrealized holding gains (losses) arising during the period 9,598 3,359 6,239 52,069 18,224 33,845 Less: Reclassification adjustment for net gains (losses) included in net income (loss) (1) 170 59 111 (4,134 ) (1,447 ) (2,687 ) Net unrealized gains (losses) on investments 9,428 3,300 6,128 56,203 19,671 36,532 Net foreign currency translation adjustments 39 11 28 205 69 136 OCI 9,467 3,311 6,156 56,408 19,740 36,668 Balance at end of period $ 37,345 $ 13,072 $ 24,273 $ 37,345 $ 13,072 $ 24,273 Three Months Ended September 30, 2016 Nine Months Ended September 30, 2016 (In thousands) Before Tax Tax Effect Net of Tax Before Tax Tax Effect Net of Tax Balance at beginning of period $ 95,548 $ 33,443 $ 62,105 $ (28,425 ) $ (9,948 ) $ (18,477 ) OCI: Unrealized gains (losses) on investments: Unrealized holding gains (losses) arising during the period 10,682 3,739 6,943 133,253 46,639 86,614 Less: Reclassification adjustment for net gains (losses) included in net income (loss) (1) 5,685 1,990 3,695 3,533 1,237 2,296 Net unrealized gains (losses) on investments 4,997 1,749 3,248 129,720 45,402 84,318 Net foreign currency translation adjustments (47 ) (11 ) (36 ) (523 ) (177 ) (346 ) Net actuarial loss 240 84 156 (34 ) (12 ) (22 ) OCI 5,190 1,822 3,368 129,163 45,213 83,950 Balance at end of period $ 100,738 $ 35,265 $ 65,473 $ 100,738 $ 35,265 $ 65,473 ______________________ (1) Included in net gains (losses) on investments and other financial instruments on our consolidated statements of operations. |
Note 15 - Statutory Informati35
Note 15 - Statutory Information (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Supplementary Insurance Information [Abstract] | |
Risk To Capital Calculation [Table Text Block] | Radian Guaranty’s Risk-to-capital calculation appears in the table below. For purposes of the Risk-to-capital calculation, as well as the Risk-to-capital requirements imposed by certain states, statutory capital is defined as the sum of statutory policyholders’ surplus plus statutory contingency reserves. September 30, December 31, ($ in millions) RIF, net (1) $ 38,712.8 $ 35,357.8 Common stock and paid-in capital $ 1,866.2 $ 2,041.0 Unassigned earnings (deficit) (740.3 ) (691.3 ) Statutory policyholders’ surplus 1,125.9 1,349.7 Contingency reserve 1,565.7 1,260.6 Statutory capital $ 2,691.6 $ 2,610.3 Risk-to-capital 14.4:1 13.5:1 ______________________ (1) Excludes risk ceded through reinsurance contracts (to third parties and affiliates) and RIF on defaulted loans. |
Note 1 - Condensed Consolidat36
Note 1 - Condensed Consolidated Financial Statements - Business Overview and Significant Accounting Policies Business Overview and Significant Accounting Policies(Details) $ in Thousands, shares in Millions | Jan. 27, 2017USD ($)shares | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)segment | Sep. 30, 2016USD ($) | Sep. 30, 2018USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2018USD ($) | Aug. 09, 2017USD ($) | Dec. 31, 2015USD ($) | |||
Basis of Presentation and Business Overview [Line Items] | ||||||||||||||
Securities Lending Rate of Collateral Required | 1.02 | |||||||||||||
Business Overview [Abstract] | ||||||||||||||
Number of Operating Segments | segment | 2 | |||||||||||||
Mortgage Insurance [Abstract] | ||||||||||||||
Loss on induced conversion and debt extinguishment | $ (45,766) | $ (17,397) | $ (51,469) | $ (75,075) | ||||||||||
Restructuring and other exit costs | 12,038 | 0 | 12,038 | 0 | ||||||||||
Restructuring and other exit costs - cash payments | 5,400 | |||||||||||||
Impairment of goodwill (Note 6) | 0 | 0 | 184,374 | 0 | ||||||||||
Finite-Lived Intangible Assets, Net | $ 56,045 | $ 56,045 | ||||||||||||
Repurchase Agreements, Securities Lending Transactions, and Repurchase-to-Maturity Transactions Accounted for as Secured Borrowings, Description of Potential Risks | Under our securities lending agreements, the Borrower generally may return the loaned securities to us at any time, which would require us to return the collateral within the standard settlement period for the loaned securities on the principal exchange or market in which the securities are traded. We manage this liquidity risk associated with cash collateral by regularly monitoring our available sources of cash and collateral to ensure we can meet short-term liquidity demands in both normal and stressed scenarios. We may use our general liquidity resources to meet any potential cash demands when loaned securities are returned to us. The credit risk under these programs is reduced by the amounts of collateral received. On a daily basis, the value of the underlying securities that we have loaned to the Borrowers is compared to the value of cash and securities collateral we received from the Borrowers, and additional cash or securities are requested or returned, as applicable. In addition, we are indemnified against counterparty credit risk by the intermediary. | |||||||||||||
Mortgage Insurance Segment | ||||||||||||||
Mortgage Insurance [Abstract] | ||||||||||||||
Private Mortgage Insurance Protects Lenders For Loans Made With Less Than This Maximum Down Payment Percentage | 20.00% | 20.00% | ||||||||||||
Private Mortgage Insurance Protects Lenders For Refinancings Made to Home Buyers With Less Than This Maximum Equity-Ownership Percentage | 0.20 | 0.20 | ||||||||||||
Risk In Force | $ 51,200,000 | $ 51,200,000 | ||||||||||||
Mortgage and Real Estate Services Segment [Member] | ||||||||||||||
Mortgage Insurance [Abstract] | ||||||||||||||
Restructuring and other exit costs | 5,463 | $ 0 | [1] | 5,463 | [1] | $ 0 | [1] | |||||||
Impairment of goodwill (Note 6) | $ 184,400 | 184,374 | $ 0 | |||||||||||
Impairment of Intangible Assets, Finite-lived | 15,800 | |||||||||||||
Goodwill | 10,922 | 10,922 | 195,170 | $ 195,170 | ||||||||||
Finite-Lived Intangible Assets, Net | 56,045 | 56,045 | $ 81,058 | |||||||||||
Convertible Senior Notes Due 2017 | ||||||||||||||
Mortgage Insurance [Abstract] | ||||||||||||||
Repayments of Convertible Debt | 31,600 | |||||||||||||
Convertible Senior Notes Due 2019 | ||||||||||||||
Mortgage Insurance [Abstract] | ||||||||||||||
Debt Instrument, Repurchase Amount | $ 68,000 | |||||||||||||
Repayments of Convertible Debt | 110,100 | |||||||||||||
Loss on induced conversion and debt extinguishment | $ (4,500) | |||||||||||||
Senior Notes [Member] | Senior Notes Due 2024 [Member] | ||||||||||||||
Mortgage Insurance [Abstract] | ||||||||||||||
Debt Instrument, Face Amount | 450,000 | 450,000 | ||||||||||||
Senior Notes [Member] | Senior Notes Due 2019 [Member] | ||||||||||||||
Mortgage Insurance [Abstract] | ||||||||||||||
Debt Instrument, Face Amount | 300,000 | 300,000 | ||||||||||||
Debt Instrument, Repurchase Amount | 141,400 | 141,400 | ||||||||||||
Senior Notes [Member] | Senior Notes Due 2021 | ||||||||||||||
Mortgage Insurance [Abstract] | ||||||||||||||
Debt Instrument, Repurchase Amount | 152,300 | 152,300 | ||||||||||||
Senior Notes [Member] | Senior Notes due 2019, 2020, and 2021 [Member] | ||||||||||||||
Mortgage Insurance [Abstract] | ||||||||||||||
Loss on induced conversion and debt extinguishment | (45,800) | |||||||||||||
Senior Notes [Member] | Senior Notes Due 2020 | ||||||||||||||
Mortgage Insurance [Abstract] | ||||||||||||||
Debt Instrument, Repurchase Amount | 115,900 | $ 115,900 | ||||||||||||
Convertible Debt | Convertible Senior Notes Due 2017 | ||||||||||||||
Mortgage Insurance [Abstract] | ||||||||||||||
Debt Instrument, Repurchase Amount | 21,600 | |||||||||||||
Loss on induced conversion and debt extinguishment | $ (1,200) | |||||||||||||
Convertible Debt | Convertible Senior Notes Due 2019 | ||||||||||||||
Mortgage Insurance [Abstract] | ||||||||||||||
Reduction in Dilutive Shares Attributable to Redemption of Conversion of Debt Securities | shares | 6.4 | |||||||||||||
Total Primary Insurance Mortgage Insurance Products [Member] | Mortgage Insurance Segment | ||||||||||||||
Mortgage Insurance [Abstract] | ||||||||||||||
Concentration Risk, Percentage | 98.20% | |||||||||||||
Pool Insurance Mortgage Insurance Product [Member] | Mortgage Insurance Segment | ||||||||||||||
Mortgage Insurance [Abstract] | ||||||||||||||
Concentration Risk, Percentage | 1.60% | |||||||||||||
Third Quarter 2017 Repurchase Program [Member] | ||||||||||||||
Mortgage Insurance [Abstract] | ||||||||||||||
Stock Repurchase Program, Authorized Amount | $ 50,000 | |||||||||||||
Hurricanes Harvey and Irma [Member] | Mortgage Insurance Segment | ||||||||||||||
Mortgage Insurance [Abstract] | ||||||||||||||
Concentration Risk, Percentage | 8.80% | |||||||||||||
Risk In Force | $ 4,400,000 | $ 4,400,000 | ||||||||||||
Securities Financing Transaction, Fair Value [Member] | ||||||||||||||
Basis of Presentation and Business Overview [Line Items] | ||||||||||||||
Securities Lending Rate of Collateral Required | 1 | |||||||||||||
Scenario, Forecast [Member] | ||||||||||||||
Mortgage Insurance [Abstract] | ||||||||||||||
Restructuring and other exit costs | $ 7,500 | $ 19,500 | ||||||||||||
Restructuring and other exit costs - cash payments | $ 6,000 | |||||||||||||
Scenario, Forecast [Member] | Asset Impairment Charges [Member] | ||||||||||||||
Mortgage Insurance [Abstract] | ||||||||||||||
Restructuring and other exit costs | 8,100 | |||||||||||||
Scenario, Forecast [Member] | Employee Severance and Benefit Costs [Member] | ||||||||||||||
Mortgage Insurance [Abstract] | ||||||||||||||
Restructuring and other exit costs | 6,900 | |||||||||||||
Scenario, Forecast [Member] | Facility and Lease Termination Costs [Member] | ||||||||||||||
Mortgage Insurance [Abstract] | ||||||||||||||
Restructuring and other exit costs | 2,700 | |||||||||||||
Scenario, Forecast [Member] | Contract Termination and Other Restructuring Costs [Member] | ||||||||||||||
Mortgage Insurance [Abstract] | ||||||||||||||
Restructuring and other exit costs | $ 1,800 | |||||||||||||
[1] | Primarily includes employee severance and related benefit costs. Does not include impairment of long-lived assets, which is not considered a component of adjusted pretax operating income. |
Note 2 - Net Income Per Share N
Note 2 - Net Income Per Share Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | ||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | |||||
Net Income (Loss) Available to Common Stockholders, Diluted | $ 65,142 | $ 83,651 | $ 114,057 | $ 252,315 | |
Dilutive effect of share-based compensation arrangements (2) | [1] | 4,096 | 3,129 | 4,027 | 2,846 |
Adjusted average common shares outstanding—diluted | 219,391 | 225,968 | 220,230 | 230,672 | |
Net income (loss)—diluted | $ 0.30 | $ 0.37 | $ 0.52 | $ 1.09 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||
Net income—basic | $ 65,142 | $ 82,803 | $ 114,272 | $ 247,164 | |
Average common shares outstanding - basic | 215,279 | 214,387 | 215,194 | 210,858 | |
Net income per share - basic | $ 0.30 | $ 0.39 | $ 0.53 | $ 1.17 | |
Convertible Debt | Convertible Senior Notes Due 2019 | |||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | |||||
Adjustment for dilutive Convertible Senior Notes due 2019, net of tax (1) | [2] | $ 0 | $ 848 | $ (215) | $ 5,151 |
Dilutive effect of Convertible Senior Notes | 0 | 8,274 | 611 | 16,897 | |
Convertible Debt | Convertible Senior Notes Due 2017 | |||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | |||||
Dilutive effect of Convertible Senior Notes | [1] | 16 | 178 | 398 | 71 |
Stock Compensation Plan [Member] | |||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 676 | 1,045 | 440 | 1,045 | |
Convertible Debt Securities [Member] | |||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 0 | 0 | 0 | 1,902 | |
[1] | The following number of shares of our common stock equivalents issued under our share-based compensation arrangements and our convertible debt were not included in the calculation of diluted net income per share because they were anti-dilutive: Three Months EndedSeptember 30, Nine Months EndedSeptember 30,(In thousands)2017 2016 2017 2016Shares of common stock equivalents676 1,045 440 1,045Shares of Convertible Senior Notes due 2017— — — 1,902 | ||||
[2] | As applicable, includes coupon interest, amortization of discount and fees, and other changes in income that would result from the assumed conversion. Included in the nine months ended September 30, 2017 is a benefit related to our adjustment of estimated accrued expense to actual amounts, resulting from the January 2017 settlement of our obligations on the remaining Convertible Senior Notes due 2019. |
Note 3 - Segment Reporting Sche
Note 3 - Segment Reporting Schedule of Segment Reporting Information by Segment (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)segment | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($) | ||||||
Segment Reporting Information [Line Items] | |||||||||||
Goodwill, Impairment Loss | $ 0 | $ 0 | $ (184,374) | $ 0 | |||||||
Number of Operating Segments | segment | 2 | ||||||||||
Net premiums earned-insurance | 236,702 | 238,149 | $ 687,598 | 688,184 | |||||||
Services revenue | 39,571 | 45,877 | 115,400 | 118,989 | |||||||
Net investment income | 32,540 | 28,430 | 93,643 | 84,470 | |||||||
Other income | 760 | 716 | 2,118 | 2,836 | |||||||
Policy acquisition costs | 5,554 | 6,119 | 18,406 | 17,901 | |||||||
Cost of services | 27,240 | 29,447 | 81,250 | 80,362 | |||||||
Other operating expenses before corporate allocations | 64,195 | 62,119 | 201,322 | 182,480 | |||||||
Restructuring and other exit costs | 12,038 | 0 | 12,038 | 0 | |||||||
Adjusted pretax operating income (loss) | 155,619 | 139,929 | 444,636 | 401,533 | |||||||
Net gains (losses) on investments and other financial instruments | 2,480 | 7,711 | 4,960 | 69,524 | |||||||
Total assets | 5,844,273 | 5,844,273 | $ 5,863,174 | ||||||||
Mortgage Insurance Segment | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net premiums written—insurance | [1] | 247,810 | 240,999 | [2] | 713,782 | 499,662 | [2] | ||||
(Increase) decrease in unearned premiums | (11,108) | (2,850) | [2] | (26,184) | 188,522 | [2] | |||||
Net premiums earned-insurance | 236,702 | 238,149 | [2] | 687,598 | 688,184 | [2] | |||||
Net investment income | 32,540 | 28,430 | [2] | 93,643 | 84,470 | [2] | |||||
Other income | 760 | 716 | [2] | 2,118 | 2,836 | [2] | |||||
Total | [3] | 270,002 | 267,295 | [2] | 783,359 | 775,490 | [2] | ||||
Provision for losses | 35,980 | 56,151 | [2] | 100,926 | 149,500 | [2] | |||||
Policy acquisition costs | 5,554 | 6,119 | [2] | 18,406 | 17,901 | [2] | |||||
Other operating expenses before corporate allocations | 36,941 | 35,940 | [2] | 114,169 | 102,851 | [2] | |||||
Total | [4] | 78,475 | 98,210 | [2] | 233,501 | 270,252 | [2] | ||||
Adjusted pretax operating income (loss) before corporate allocations | 191,527 | 169,085 | [2] | 549,858 | 505,238 | [2] | |||||
Allocation of corporate operating expenses | 11,737 | 11,911 | [2] | 41,817 | 35,526 | [2] | |||||
Allocation of interest expense | 11,282 | 15,360 | [2] | 34,539 | 50,596 | [2] | |||||
Adjusted pretax operating income (loss) | [5] | 168,508 | 141,814 | [2] | 473,502 | 419,116 | [2] | ||||
Inter-segment expenses | 1,491 | 2,156 | 5,726 | 5,702 | |||||||
Total assets | 5,630,687 | 5,630,687 | 5,506,338 | ||||||||
Mortgage and Real Estate Services Segment [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Goodwill, Impairment Loss | $ (184,400) | (184,374) | 0 | ||||||||
Services revenue | [6] | 41,062 | 48,033 | [7] | 121,126 | 124,691 | [7] | ||||
Cost of services | 27,544 | 29,655 | [7] | 82,196 | 81,239 | [7] | |||||
Other operating expenses before corporate allocations | 12,781 | 13,575 | [7] | 38,188 | 40,973 | [7] | |||||
Restructuring and other exit costs | 5,463 | 0 | [8] | 5,463 | [8] | 0 | [8] | ||||
Total | 45,788 | 43,230 | [7] | 125,847 | 122,212 | [7] | |||||
Adjusted pretax operating income (loss) before corporate allocations | (4,726) | 4,803 | [7] | (4,721) | 2,479 | [7] | |||||
Allocation of corporate operating expenses | 3,730 | 2,265 | [7] | 10,852 | 6,795 | [7] | |||||
Allocation of interest expense | 4,433 | 4,423 | [7] | 13,293 | 13,267 | [7] | |||||
Adjusted pretax operating income (loss) | [5] | (12,889) | (1,885) | [7] | (28,866) | (17,583) | [7] | ||||
Inter-segment revenues | 1,491 | $ 2,156 | 5,726 | $ 5,702 | |||||||
Total assets | 213,586 | [9] | 213,586 | [9] | $ 356,836 | ||||||
Senior Notes [Member] | Senior Notes Due 2019 [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Debt Instrument, Face Amount | $ 300,000 | $ 300,000 | |||||||||
[1] | Net of ceded premiums written under the QSR Transactions and the Single Premium QSR Transaction. See Note 7 for additional information. | ||||||||||
[2] | Reflects changes made during the fourth quarter of 2016 to align our segment reporting structure concurrent with changes in personnel reporting lines and management oversight related to contract underwriting performed on behalf of third parties. Revenue and expenses for this business are now reflected in the Services segment. As a result, Services revenue, cost of services and other operating expenses have increased, with offsetting reductions in Mortgage Insurance other income and other operating expenses. | ||||||||||
[3] | Excludes net gains on investments and other financial instruments of $2.5 million and $5.0 million, respectively, for the three and nine months ended September 30, 2017, and net gains on investments and other financial instruments of $7.7 million and $69.5 million, respectively, for the three and nine months ended September 30, 2016, not included in adjusted pretax operating income. | ||||||||||
[4] | Includes inter-segment expenses as follows: Three Months EndedSeptember 30, Nine Months EndedSeptember 30,(In thousands)2017 2016 2017 2016Inter-segment expenses$1,491 $2,156 $5,726 $5,702 | ||||||||||
[5] | Includes inter-segment expenses and revenues as listed in the notes to the preceding tables. | ||||||||||
[6] | Includes inter-segment revenues as follows: Three Months EndedSeptember 30, Nine Months EndedSeptember 30,(In thousands)2017 2016 2017 2016Inter-segment revenues$1,491 $2,156 $5,726 $5,702 | ||||||||||
[7] | Reflects changes made during the fourth quarter of 2016 to align our segment reporting structure concurrent with changes in personnel reporting lines and management oversight related to contract underwriting performed on behalf of third parties. Revenue and expenses for this business are now reflected in the Services segment. As a result, Services revenue, cost of services and other operating expenses have increased, with offsetting reductions in Mortgage Insurance other income and other operating expenses. | ||||||||||
[8] | Primarily includes employee severance and related benefit costs. Does not include impairment of long-lived assets, which is not considered a component of adjusted pretax operating income. | ||||||||||
[9] | The decrease in total assets for the Services segment at September 30, 2017, as compared to December 31, 2016, is primarily due to the impairment of goodwill and other intangible assets. See Note 6 for further details. |
Note 3 - Segment Reporting Reco
Note 3 - Segment Reporting Reconciliation of Segment to Consolidated Results Pretax (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Sep. 30, 2017 | Jun. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||
Adjusted pretax operating income (loss) | $ 155,619 | $ 139,929 | $ 444,636 | $ 401,533 | |||||
Net gains (losses) on investments and other financial instruments | 2,480 | 7,711 | 4,960 | 69,524 | |||||
Loss on induced conversion and debt extinguishment | (45,766) | (17,397) | (51,469) | (75,075) | |||||
Acquisition-related (expenses) benefits | [1] | (54) | (10) | (126) | (161) | ||||
Goodwill, Impairment Loss | 0 | 0 | (184,374) | 0 | |||||
Increase (Decrease) in Goodwill and Intangible Assets | (2,890) | (3,292) | (25,042) | (9,931) | |||||
Impairment of Long-Lived Assets Held-for-use | [2] | (6,575) | 0 | (6,575) | 0 | ||||
Pretax income | 102,814 | 126,941 | 182,010 | 385,890 | |||||
Mortgage Insurance Segment | |||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||
Adjusted pretax operating income (loss) | [3] | 168,508 | 141,814 | [4] | 473,502 | 419,116 | [4] | ||
Mortgage and Real Estate Services Segment [Member] | |||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||
Adjusted pretax operating income (loss) | [3] | $ (12,889) | $ (1,885) | [5] | (28,866) | $ (17,583) | [5] | ||
Goodwill, Impairment Loss | $ (184,400) | $ (184,374) | $ 0 | ||||||
[1] | Acquisition-related expenses represent expenses incurred to effect the acquisition of a business, net of adjustments to accruals previously recorded for acquisition expenses. | ||||||||
[2] | Included within restructuring and other exit costs. See Note 1. | ||||||||
[3] | Includes inter-segment expenses and revenues as listed in the notes to the preceding tables. | ||||||||
[4] | Reflects changes made during the fourth quarter of 2016 to align our segment reporting structure concurrent with changes in personnel reporting lines and management oversight related to contract underwriting performed on behalf of third parties. Revenue and expenses for this business are now reflected in the Services segment. As a result, Services revenue, cost of services and other operating expenses have increased, with offsetting reductions in Mortgage Insurance other income and other operating expenses. | ||||||||
[5] | Reflects changes made during the fourth quarter of 2016 to align our segment reporting structure concurrent with changes in personnel reporting lines and management oversight related to contract underwriting performed on behalf of third parties. Revenue and expenses for this business are now reflected in the Services segment. As a result, Services revenue, cost of services and other operating expenses have increased, with offsetting reductions in Mortgage Insurance other income and other operating expenses. |
Note 4 - Fair Value of Financ40
Note 4 - Fair Value of Financial Instruments Fair Value Assets Liabilities by Hierarchy Level (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Gain (Loss) on Investments | $ 2,321,000 | $ 7,846,000 | $ 4,124,000 | $ 66,763,000 | |||||
Other than Temporary Impairment Losses, Investments | 0 | 0 | 1,000,000 | 0 | |||||
Carrying (Reported) Amount, Fair Value Disclosure [Member] | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Cost Method Investments | 599,000 | 599,000 | $ 1,195,000 | ||||||
Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 4,570,159,000 | [1] | 4,570,159,000 | [1] | 4,461,235,000 | [2] | |||
Total Assets at Fair Value | 4,570,159,000 | 4,570,159,000 | 4,461,235,000 | ||||||
Fair Value, Assets, Level 2 to Level 1 Transfers, Amount | 0 | 0 | 0 | 0 | |||||
Fair Value, Assets, Level 1 to Level 2 Transfers, Amount | 0 | 0 | 0 | 0 | |||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Transfers, Net | 0 | 0 | 0 | 0 | |||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Transfers, Net | 0 | $ 0 | 0 | $ 0 | |||||
US government and agency securities | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 149,823,000 | 149,823,000 | 237,479,000 | ||||||
State and municipal obligations | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 385,486,000 | 385,486,000 | 358,536,000 | ||||||
Money market instruments | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 155,957,000 | 155,957,000 | 431,472,000 | ||||||
Corporate bonds and notes | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 2,291,267,000 | 2,291,267,000 | 2,024,205,000 | ||||||
RMBS | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 207,150,000 | 207,150,000 | 388,842,000 | ||||||
CMBS | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 495,229,000 | 495,229,000 | 507,273,000 | ||||||
Other ABS | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 620,441,000 | 620,441,000 | 450,128,000 | ||||||
Foreign government securities | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 36,684,000 | 36,684,000 | 32,807,000 | ||||||
Equity securities | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 188,502,000 | 188,502,000 | 1,330,000 | ||||||
Other investments | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 39,620,000 | [3] | 39,620,000 | [3] | 29,163,000 | [4] | |||
Fair Value, Inputs, Level 1 | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 481,205,000 | [1] | 481,205,000 | [1] | 668,951,000 | [2] | |||
Total Assets at Fair Value | 481,205,000 | 481,205,000 | 668,951,000 | ||||||
Fair Value, Inputs, Level 1 | US government and agency securities | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 137,606,000 | 137,606,000 | 237,479,000 | ||||||
Fair Value, Inputs, Level 1 | State and municipal obligations | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 0 | 0 | 0 | ||||||
Fair Value, Inputs, Level 1 | Money market instruments | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 155,957,000 | 155,957,000 | 431,472,000 | ||||||
Fair Value, Inputs, Level 1 | Corporate bonds and notes | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 0 | 0 | 0 | ||||||
Fair Value, Inputs, Level 1 | RMBS | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 0 | 0 | 0 | ||||||
Fair Value, Inputs, Level 1 | CMBS | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 0 | 0 | 0 | ||||||
Fair Value, Inputs, Level 1 | Other ABS | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 0 | 0 | 0 | ||||||
Fair Value, Inputs, Level 1 | Foreign government securities | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 0 | 0 | 0 | ||||||
Fair Value, Inputs, Level 1 | Equity securities | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 187,642,000 | 187,642,000 | 0 | ||||||
Fair Value, Inputs, Level 1 | Other investments | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 0 | [3] | 0 | [3] | 0 | [4] | |||
Fair Value, Inputs, Level 2 | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 4,088,954,000 | [1] | 4,088,954,000 | [1] | 3,791,284,000 | [2] | |||
Total Assets at Fair Value | 4,088,954,000 | 4,088,954,000 | 3,791,284,000 | ||||||
Fair Value, Inputs, Level 2 | US government and agency securities | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 12,217,000 | 12,217,000 | 0 | ||||||
Fair Value, Inputs, Level 2 | State and municipal obligations | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 385,486,000 | 385,486,000 | 358,536,000 | ||||||
Fair Value, Inputs, Level 2 | Money market instruments | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 0 | 0 | 0 | ||||||
Fair Value, Inputs, Level 2 | Corporate bonds and notes | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 2,291,267,000 | 2,291,267,000 | 2,024,205,000 | ||||||
Fair Value, Inputs, Level 2 | RMBS | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 207,150,000 | 207,150,000 | 388,842,000 | ||||||
Fair Value, Inputs, Level 2 | CMBS | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 495,229,000 | 495,229,000 | 507,273,000 | ||||||
Fair Value, Inputs, Level 2 | Other ABS | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 620,441,000 | 620,441,000 | 450,128,000 | ||||||
Fair Value, Inputs, Level 2 | Foreign government securities | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 36,684,000 | 36,684,000 | 32,807,000 | ||||||
Fair Value, Inputs, Level 2 | Equity securities | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 860,000 | 860,000 | 830,000 | ||||||
Fair Value, Inputs, Level 2 | Other investments | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 39,620,000 | [3] | 39,620,000 | [3] | 28,663,000 | [4] | |||
Fair Value, Inputs, Level 3 | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | [2] | 1,000,000 | |||||||
Total Assets at Fair Value | 0 | 0 | 1,000,000 | ||||||
Gain (Loss) on Investments | 0 | ||||||||
Fair Value, Measurement with Unobservable Inputs Reconciliations, Recurring Basis, Liability Value | $ 0 | $ 0 | 0 | ||||||
Fair Value, Inputs, Level 3 | US government and agency securities | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 0 | ||||||||
Fair Value, Inputs, Level 3 | State and municipal obligations | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 0 | ||||||||
Fair Value, Inputs, Level 3 | Money market instruments | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 0 | ||||||||
Fair Value, Inputs, Level 3 | Corporate bonds and notes | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 0 | ||||||||
Fair Value, Inputs, Level 3 | RMBS | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 0 | ||||||||
Fair Value, Inputs, Level 3 | CMBS | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 0 | ||||||||
Fair Value, Inputs, Level 3 | Other ABS | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 0 | ||||||||
Fair Value, Inputs, Level 3 | Foreign government securities | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 0 | ||||||||
Fair Value, Inputs, Level 3 | Equity securities | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 500,000 | ||||||||
Fair Value, Inputs, Level 3 | Other investments | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | [4] | $ 500,000 | |||||||
Maximum [Member] | Fair Value, Inputs, Level 3 | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Level III Assets as a Percentage of Total Assets Measured at Fair Value (less than 0.1%) | 0.10% | ||||||||
[1] | Does not include certain other invested assets ($0.6 million), primarily invested in limited partnerships, accounted for as cost-method investments and not measured at fair value. Also does not include cash collateral held under securities lending agreements reinvested in short-term investments, and includes securities loaned to third-party borrowers under securities lending agreements. | ||||||||
[2] | Does not include certain other invested assets ($1.2 million), primarily invested in limited partnerships, accounted for as cost-method investments and not measured at fair value. | ||||||||
[3] | Comprising short-term certificates of deposit and commercial paper. | ||||||||
[4] | Comprising short-term certificates of deposit and commercial paper, included within Level II, and convertible notes of non-public company issuers, included within Level III. |
Note 4 - Fair Value of Financ41
Note 4 - Fair Value of Financial Instruments Other Fair Value Disclosure (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | $ 1,026,806 | $ 1,069,537 |
Fair Value, Measurements, Recurring | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets, Fair Value Disclosure | 4,570,159 | 4,461,235 |
Carrying (Reported) Amount, Fair Value Disclosure [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cost Method Investments | 599 | 1,195 |
Long-term debt | 1,026,806 | 1,069,537 |
Estimate of Fair Value, Fair Value Disclosure [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cost Method Investments, Fair Value Disclosure | 3,404 | 3,789 |
Long-term Debt, Fair Value | 1,095,409 | 1,214,471 |
Fair Value, Inputs, Level 2 | Fair Value, Measurements, Recurring | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets, Fair Value Disclosure | 4,088,954 | 3,791,284 |
Fair Value, Inputs, Level 3 | Fair Value, Measurements, Recurring | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets, Fair Value Disclosure | $ 0 | $ 1,000 |
Note 5 - Investments Unrealized
Note 5 - Investments Unrealized Gain (Loss) on Investments (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | ||
Schedule of Available-for-sale Securities [Line Items] | ||||
Amortized Cost Debt and Equity Securities | $ 3,440,462 | $ 2,857,798 | ||
Available-for-sale Securities | 3,478,709 | 2,839,842 | ||
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 49,063 | 20,827 | ||
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax | 10,816 | 38,783 | ||
US government and agency securities | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Amortized Cost Debt and Equity Securities | 61,287 | 78,931 | ||
Available-for-sale Securities | 60,860 | 75,474 | ||
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 187 | 2 | ||
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax | 614 | 3,459 | ||
US States and Political Subdivisions Debt Securities [Member] | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Amortized Cost Debt and Equity Securities | 125,485 | 66,124 | ||
Available-for-sale Securities | 129,507 | 67,171 | ||
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 4,461 | 1,868 | ||
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax | 439 | 821 | ||
Corporate bonds and notes | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Amortized Cost Debt and Equity Securities | 1,806,796 | 1,463,720 | ||
Available-for-sale Securities | 1,836,316 | 1,455,628 | ||
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 34,927 | 14,320 | ||
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax | 5,407 | 22,412 | ||
RMBS | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Amortized Cost Debt and Equity Securities | 176,789 | 358,262 | ||
Available-for-sale Securities | 175,408 | 350,628 | ||
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 796 | 197 | ||
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax | 2,177 | 7,831 | ||
CMBS | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Amortized Cost Debt and Equity Securities | 433,916 | 429,057 | ||
Available-for-sale Securities | 436,892 | 428,289 | ||
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 4,167 | 2,255 | ||
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax | 1,191 | 3,023 | ||
Other ABS | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Amortized Cost Debt and Equity Securities | 616,687 | 433,603 | ||
Available-for-sale Securities | 618,832 | 434,728 | ||
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 2,627 | 2,037 | ||
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax | 482 | 912 | ||
Foreign government securities | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Amortized Cost Debt and Equity Securities | 31,437 | 24,771 | ||
Available-for-sale Securities | 32,392 | 24,594 | ||
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 961 | 148 | ||
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax | 6 | 325 | ||
Other than Securities Investment [Member] | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Amortized Cost Debt and Equity Securities | 2,000 | |||
Available-for-sale Securities | 2,000 | |||
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 0 | |||
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax | 0 | |||
Debt Securities | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Amortized Cost Debt and Equity Securities | 3,252,397 | [1] | 2,856,468 | |
Available-for-sale Securities | 3,290,207 | [1] | 2,838,512 | |
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 48,126 | [1] | 20,827 | |
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax | 10,316 | [1] | 38,783 | |
Equity securities | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Amortized Cost Debt and Equity Securities | 188,065 | [1],[2] | 1,330 | [3] |
Available-for-sale Securities | 188,502 | [1],[2] | 1,330 | [3] |
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 937 | [1],[2] | 0 | [3] |
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax | $ 500 | [1],[2] | $ 0 | [3] |
[1] | Includes loaned securities under securities lending agreements that are classified as other assets in our condensed consolidated balance sheets, as further described below. | |||
[2] | Primarily consists of investments in fixed income and equity exchange-traded funds and publicly-traded business development company equities. | |||
[3] | Primarily consists of investments in Federal Home Loan Bank stock as required in connection with the memberships of Radian Guaranty and Radian Reinsurance in the FHLB. |
Note 5 - Investments Schedule o
Note 5 - Investments Schedule of Unrealized Losses (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017USD ($)security | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)security | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($)security | |
Schedule of Available-for-sale Securities [Line Items] | |||||
Other than Temporary Impairment Losses, Investments | $ 0 | $ 0 | $ 1,000 | $ 0 | |
Continuous Loss Position Less Than Twelve Months [Abstract] | |||||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Less than One Year | security | 269 | 269 | 362 | ||
Fair value available-for-sale securities | $ 1,029,555 | $ 1,029,555 | $ 1,566,440 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | $ 10,002 | $ 10,002 | $ 37,941 | ||
Continuous Unrealized Loss Position, Twelve Months Or Greater | |||||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Greater than or Equal to One Year | security | 16 | 16 | 21 | ||
Fair value available-for-sale securities | $ 30,150 | $ 30,150 | $ 58,451 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | $ 814 | $ 814 | $ 842 | ||
Continuous Loss Position, Total | |||||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions | security | 285 | 285 | 383 | ||
Fair value available-for-sale securities | $ 1,059,705 | $ 1,059,705 | $ 1,624,891 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss | $ 10,816 | $ 10,816 | $ 38,783 | ||
US government and agency securities | |||||
Continuous Loss Position Less Than Twelve Months [Abstract] | |||||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Less than One Year | security | 8 | 8 | 7 | ||
Fair value available-for-sale securities | $ 37,926 | $ 37,926 | $ 73,160 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | $ 604 | $ 604 | $ 3,459 | ||
Continuous Unrealized Loss Position, Twelve Months Or Greater | |||||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Greater than or Equal to One Year | security | 2 | 2 | 0 | ||
Fair value available-for-sale securities | $ 1,580 | $ 1,580 | $ 0 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | $ 10 | $ 10 | $ 0 | ||
Continuous Loss Position, Total | |||||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions | security | 10 | 10 | 7 | ||
Fair value available-for-sale securities | $ 39,506 | $ 39,506 | $ 73,160 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss | $ 614 | $ 614 | $ 3,459 | ||
US States and Political Subdivisions Debt Securities [Member] | |||||
Continuous Loss Position Less Than Twelve Months [Abstract] | |||||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Less than One Year | security | 17 | 17 | 7 | ||
Fair value available-for-sale securities | $ 60,210 | $ 60,210 | $ 30,901 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | $ 439 | $ 439 | $ 821 | ||
Continuous Unrealized Loss Position, Twelve Months Or Greater | |||||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Greater than or Equal to One Year | security | 0 | 0 | 0 | ||
Fair value available-for-sale securities | $ 0 | $ 0 | $ 0 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | $ 0 | $ 0 | $ 0 | ||
Continuous Loss Position, Total | |||||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions | security | 17 | 17 | 7 | ||
Fair value available-for-sale securities | $ 60,210 | $ 60,210 | $ 30,901 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss | $ 439 | $ 439 | $ 821 | ||
Corporate bonds and notes | |||||
Continuous Loss Position Less Than Twelve Months [Abstract] | |||||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Less than One Year | security | 108 | 108 | 185 | ||
Fair value available-for-sale securities | $ 439,016 | $ 439,016 | $ 788,876 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | $ 5,104 | $ 5,104 | $ 22,135 | ||
Continuous Unrealized Loss Position, Twelve Months Or Greater | |||||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Greater than or Equal to One Year | security | 5 | 5 | 2 | ||
Fair value available-for-sale securities | $ 11,013 | $ 11,013 | $ 4,582 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | $ 303 | $ 303 | $ 277 | ||
Continuous Loss Position, Total | |||||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions | security | 113 | 113 | 187 | ||
Fair value available-for-sale securities | $ 450,029 | $ 450,029 | $ 793,458 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss | $ 5,407 | $ 5,407 | $ 22,412 | ||
RMBS | |||||
Continuous Loss Position Less Than Twelve Months [Abstract] | |||||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Less than One Year | security | 29 | 29 | 56 | ||
Fair value available-for-sale securities | $ 114,243 | $ 114,243 | $ 311,031 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | $ 1,862 | $ 1,862 | $ 7,822 | ||
Continuous Unrealized Loss Position, Twelve Months Or Greater | |||||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Greater than or Equal to One Year | security | 5 | 5 | 1 | ||
Fair value available-for-sale securities | $ 14,262 | $ 14,262 | $ 1,398 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | $ 315 | $ 315 | $ 9 | ||
Continuous Loss Position, Total | |||||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions | security | 34 | 34 | 57 | ||
Fair value available-for-sale securities | $ 128,505 | $ 128,505 | $ 312,429 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss | $ 2,177 | $ 2,177 | $ 7,831 | ||
CMBS | |||||
Continuous Loss Position Less Than Twelve Months [Abstract] | |||||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Less than One Year | security | 30 | 30 | 37 | ||
Fair value available-for-sale securities | $ 122,980 | $ 122,980 | $ 218,170 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | $ 1,009 | $ 1,009 | $ 2,909 | ||
Continuous Unrealized Loss Position, Twelve Months Or Greater | |||||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Greater than or Equal to One Year | security | 3 | 3 | 2 | ||
Fair value available-for-sale securities | $ 1,811 | $ 1,811 | $ 6,585 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | $ 182 | $ 182 | $ 114 | ||
Continuous Loss Position, Total | |||||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions | security | 33 | 33 | 39 | ||
Fair value available-for-sale securities | $ 124,791 | $ 124,791 | $ 224,755 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss | $ 1,191 | $ 1,191 | $ 3,023 | ||
Other ABS | |||||
Continuous Loss Position Less Than Twelve Months [Abstract] | |||||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Less than One Year | security | 64 | 64 | 58 | ||
Fair value available-for-sale securities | $ 174,128 | $ 174,128 | $ 131,268 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | $ 478 | $ 478 | $ 470 | ||
Continuous Unrealized Loss Position, Twelve Months Or Greater | |||||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Greater than or Equal to One Year | security | 1 | 1 | 16 | ||
Fair value available-for-sale securities | $ 1,484 | $ 1,484 | $ 45,886 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | $ 4 | $ 4 | $ 442 | ||
Continuous Loss Position, Total | |||||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions | security | 65 | 65 | 74 | ||
Fair value available-for-sale securities | $ 175,612 | $ 175,612 | $ 177,154 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss | $ 482 | $ 482 | $ 912 | ||
Foreign government securities | |||||
Continuous Loss Position Less Than Twelve Months [Abstract] | |||||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Less than One Year | security | 2 | 2 | 12 | ||
Fair value available-for-sale securities | $ 1,196 | $ 1,196 | $ 13,034 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | $ 6 | $ 6 | $ 325 | ||
Continuous Unrealized Loss Position, Twelve Months Or Greater | |||||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Greater than or Equal to One Year | security | 0 | 0 | 0 | ||
Fair value available-for-sale securities | $ 0 | $ 0 | $ 0 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | $ 0 | $ 0 | $ 0 | ||
Continuous Loss Position, Total | |||||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions | security | 2 | 2 | 12 | ||
Fair value available-for-sale securities | $ 1,196 | $ 1,196 | $ 13,034 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss | $ 6 | 6 | $ 325 | ||
Debt Securities | |||||
Schedule of Available-for-sale Securities [Line Items] | |||||
Other than Temporary Impairment Losses, Investments | 500 | ||||
Equity securities | |||||
Schedule of Available-for-sale Securities [Line Items] | |||||
Other than Temporary Impairment Losses, Investments | $ 500 | ||||
Continuous Loss Position Less Than Twelve Months [Abstract] | |||||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Less than One Year | security | 11 | 11 | |||
Fair value available-for-sale securities | $ 79,856 | $ 79,856 | |||
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | $ 500 | $ 500 | |||
Continuous Unrealized Loss Position, Twelve Months Or Greater | |||||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Greater than or Equal to One Year | security | 0 | 0 | |||
Fair value available-for-sale securities | $ 0 | $ 0 | |||
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | $ 0 | $ 0 | |||
Continuous Loss Position, Total | |||||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions | security | 11 | 11 | |||
Fair value available-for-sale securities | $ 79,856 | $ 79,856 | |||
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss | $ 500 | $ 500 |
Note 5 - Investments Investment
Note 5 - Investments Investments Trading Securities (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | |||
Unrealized Gain (Loss) on Trading Securities Held | $ 10,000 | $ 16,800 | |
Trading Securities | 636,276 | [1] | 879,862 |
US government and agency securities | |||
Schedule of Trading Securities and Other Trading Assets [Line Items] | |||
Trading Securities | 0 | 33,042 | |
State and municipal obligations | |||
Schedule of Trading Securities and Other Trading Assets [Line Items] | |||
Trading Securities | 214,599 | 259,573 | |
Corporate bonds and notes | |||
Schedule of Trading Securities and Other Trading Assets [Line Items] | |||
Trading Securities | 327,306 | 453,617 | |
RMBS | |||
Schedule of Trading Securities and Other Trading Assets [Line Items] | |||
Trading Securities | 31,742 | 38,214 | |
CMBS | |||
Schedule of Trading Securities and Other Trading Assets [Line Items] | |||
Trading Securities | 58,337 | 78,984 | |
Other ABS | |||
Schedule of Trading Securities and Other Trading Assets [Line Items] | |||
Trading Securities | 0 | 8,219 | |
Foreign government securities | |||
Schedule of Trading Securities and Other Trading Assets [Line Items] | |||
Trading Securities | $ 4,292 | $ 8,213 | |
[1] | Includes loaned securities under securities lending agreements that are classified as other assets in our condensed consolidated balance sheets, as further described below. |
Note 5 - Investments Securities
Note 5 - Investments Securities Lending Activity (Details) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2017USD ($) | Dec. 31, 2016USD ($)transaction | ||
Securities Financing Transaction [Line Items] | |||
Securities Lending Rate of Collateral Required | 1.02 | ||
Securities Loaned, Asset | $ 60,876,000 | ||
Securities Held as Collateral, at Fair Value | 0 | ||
Cash Collateral for Borrowed Securities | $ 36,782,000 | $ 0 | |
Number of Securities Lending Transactions | transaction | 0 | ||
Repurchase Agreements, Securities Lending Transactions, and Repurchase-to-Maturity Transactions Accounted for as Secured Borrowings, Description of Potential Risks | Under our securities lending agreements, the Borrower generally may return the loaned securities to us at any time, which would require us to return the collateral within the standard settlement period for the loaned securities on the principal exchange or market in which the securities are traded. We manage this liquidity risk associated with cash collateral by regularly monitoring our available sources of cash and collateral to ensure we can meet short-term liquidity demands in both normal and stressed scenarios. We may use our general liquidity resources to meet any potential cash demands when loaned securities are returned to us. The credit risk under these programs is reduced by the amounts of collateral received. On a daily basis, the value of the underlying securities that we have loaned to the Borrowers is compared to the value of cash and securities collateral we received from the Borrowers, and additional cash or securities are requested or returned, as applicable. In addition, we are indemnified against counterparty credit risk by the intermediary. | ||
Securities Financing Transaction, Fair Value [Member] | |||
Securities Financing Transaction [Line Items] | |||
Securities Lending Rate of Collateral Required | 1 | ||
Securities Loaned, Asset | [1] | $ 60,876,000 | |
Securities Borrowed, Fair Value of Collateral | [1],[2] | 25,589,000 | |
Cash Collateral for Borrowed Securities | [1],[3] | 36,782,000 | |
Securities Financing Transaction, Fair Value [Member] | Corporate bonds and notes | |||
Securities Financing Transaction [Line Items] | |||
Securities Loaned, Asset | [1] | 33,557,000 | |
Securities Financing Transaction, Fair Value [Member] | Foreign government securities | |||
Securities Financing Transaction [Line Items] | |||
Securities Loaned, Asset | [1] | 120,000 | |
Securities Financing Transaction, Fair Value [Member] | Equity securities | |||
Securities Financing Transaction [Line Items] | |||
Securities Loaned, Asset | [1] | 27,199,000 | |
Securities Financing Transaction, Cost [Member] | |||
Securities Financing Transaction [Line Items] | |||
Securities Loaned, Asset | [1] | $ 60,740,000 | |
Foreign government securities | |||
Securities Financing Transaction [Line Items] | |||
Securities Lending Rate of Collateral Required | 1.05 | ||
[1] | Our securities loaned under securities lending agreements are included at fair value within other assets on our condensed consolidated balance sheets. All of our securities lending agreements are classified as overnight and continuous. None of the amounts are subject to offsetting. | ||
[2] | Securities collateral on deposit with us from Borrowers may not be transferred or re-pledged unless the Borrower is in default, and is therefore not reflected in our condensed consolidated financial statements. | ||
[3] | All cash collateral received has been reinvested in accordance with the securities lending and collateral agreements and is included in short-term investments. Amounts payable on the return of cash collateral under securities lending agreements are included within other liabilities on our condensed consolidated balance sheets. |
Note 5 - Investments Gain (Loss
Note 5 - Investments Gain (Loss) on Investments (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017USD ($)security | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)security | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($)security | |
Gain (Loss) on Investments [Line Items] | |||||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Less than One Year | security | 269 | 269 | 362 | ||
Other gains | $ 7 | $ 15 | $ 25 | $ 33 | |
Net realized losses on investments | (32) | 7,893 | (9,393) | 3,901 | |
Other than Temporary Impairment Losses, Investments | 0 | 0 | (1,000) | 0 | |
Unrealized gains on trading securities | 2,353 | (47) | 14,517 | 62,862 | |
Total net gains on investments | 2,321 | 7,846 | 4,124 | 66,763 | |
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value | 1,029,555 | 1,029,555 | $ 1,566,440 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | $ 10,002 | $ 10,002 | $ 37,941 | ||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Greater than or Equal to One Year | security | 16 | 16 | 21 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value | $ 30,150 | $ 30,150 | $ 58,451 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | $ 814 | $ 814 | $ 842 | ||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions | security | 285 | 285 | 383 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value | $ 1,059,705 | $ 1,059,705 | $ 1,624,891 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss | 10,816 | 10,816 | $ 38,783 | ||
Net gains (losses) on other financial instruments | 159 | (135) | 836 | 2,761 | |
Net Gains (Losses) on Investments and Other Financial Instruments | 2,480 | 7,711 | 4,960 | 69,524 | |
Fixed Maturities [Member] | |||||
Gain (Loss) on Investments [Line Items] | |||||
Available-for-sale Securities, Gross Realized (Loss) Gain, Excluding Other than Temporary Impairments | 137 | 5,685 | (3,552) | 3,703 | |
Equity securities | |||||
Gain (Loss) on Investments [Line Items] | |||||
Available-for-sale Securities, Gross Realized (Loss) Gain, Excluding Other than Temporary Impairments | 33 | 0 | 418 | (170) | |
Trading Securities [Member] | |||||
Gain (Loss) on Investments [Line Items] | |||||
Trading securities | (223) | 1,524 | (6,266) | (295) | |
Short-term Investments [Member] | |||||
Gain (Loss) on Investments [Line Items] | |||||
Short-term investments | 14 | 38 | (18) | (1) | |
Other investments | |||||
Gain (Loss) on Investments [Line Items] | |||||
Cost-method Investments, Realized Gain (Loss), Excluding Other than Temporary Impairments | $ 0 | $ 631 | $ 0 | $ 631 | |
US States and Political Subdivisions Debt Securities [Member] | |||||
Gain (Loss) on Investments [Line Items] | |||||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Less than One Year | security | 17 | 17 | 7 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value | $ 60,210 | $ 60,210 | $ 30,901 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | $ 439 | $ 439 | $ 821 | ||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Greater than or Equal to One Year | security | 0 | 0 | 0 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value | $ 0 | $ 0 | $ 0 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | $ 0 | $ 0 | $ 0 | ||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions | security | 17 | 17 | 7 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value | $ 60,210 | $ 60,210 | $ 30,901 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss | $ 439 | $ 439 | $ 821 |
Note 5 - Investments Schedule47
Note 5 - Investments Schedule of Contractual Maturities (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | |
Available-for-sale Securities, Amortized Cost | |||
Available-for-sale Debt Securities, Amortized Cost Basis | $ 3,218,614 | $ 2,856,468 | |
Available-for-sale Securities, Fair Value | |||
Available-for-sale Securities, Debt Securities | 3,256,581 | 2,838,512 | |
Debt Securities | |||
Available-for-sale Securities, Amortized Cost | |||
Available-for-sale Debt Securities, Amortized Cost Basis | [1] | 3,252,397 | |
Available-for-sale Securities, Fair Value | |||
Available-for-sale Securities, Debt Securities | [1] | 3,290,207 | |
Non Asset Backed Security Investments, Contractual Maturities | |||
Available-for-sale Securities, Amortized Cost | |||
Due in one year or less | [2] | 41,767 | |
Due after one year through five years | [2] | 687,822 | |
Due after five years through ten years | [2] | 965,360 | |
Due after ten years | [2] | 330,056 | |
Available-for-sale Securities, Fair Value | |||
Due in one year or less | [2] | 41,780 | |
Due after one year through five years | [2] | 694,932 | |
Due after five years through ten years | [2] | 974,600 | |
Due after ten years | [2] | 347,763 | |
RMBS | |||
Available-for-sale Securities, Amortized Cost | |||
Available-for-sale Securities, Debt Maturities, without Single Maturity Date, Amortized Cost Basis | [3] | 176,789 | |
Available-for-sale Securities, Fair Value | |||
Available-for-sale Securities, Debt Maturities, without Single Maturity Date, Fair Value | [3] | 175,408 | |
CMBS | |||
Available-for-sale Securities, Amortized Cost | |||
Available-for-sale Securities, Debt Maturities, without Single Maturity Date, Amortized Cost Basis | [3] | 433,916 | |
Available-for-sale Securities, Fair Value | |||
Available-for-sale Securities, Debt Maturities, without Single Maturity Date, Fair Value | [3] | 436,892 | |
Other ABS | |||
Available-for-sale Securities, Amortized Cost | |||
Available-for-sale Securities, Debt Maturities, without Single Maturity Date, Amortized Cost Basis | [3] | 616,687 | |
Available-for-sale Securities, Fair Value | |||
Available-for-sale Securities, Debt Maturities, without Single Maturity Date, Fair Value | [3] | 618,832 | |
2013 Freddie Mac Agreement [Member] | Radian Guaranty Inc [Member] | |||
Available-for-sale Securities, Fair Value | |||
Marketable Securities, Restricted | $ 5,500 | $ 63,900 | |
[1] | Includes securities loaned under securities lending agreements. | ||
[2] | Actual maturities may differ as a result of calls before scheduled maturity. | ||
[3] | RMBS, CMBS and Other ABS are shown separately, as they are not due at a single maturity date. |
Note 6 - Goodwill and Other I48
Note 6 - Goodwill and Other Intangible Assets, Net Schedule of Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2017 | Jun. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill [Roll Forward] | |||||||
Goodwill, Impairment Loss | $ 0 | $ 0 | $ (184,374) | $ 0 | |||
Mortgage and Real Estate Services Segment [Member] | |||||||
Goodwill [Roll Forward] | |||||||
Goodwill, Gross, Beginning of Period | 197,265 | 197,265 | $ 197,265 | ||||
Goodwill, Acquired During Period | 126 | 0 | |||||
Goodwill, Gross, End of Period | 197,391 | 197,391 | 197,265 | ||||
Goodwill, Impaired, Accumulated Impairment Loss, Beginning of Period | (2,095) | $ (2,095) | (2,095) | ||||
Goodwill, Impairment Loss | $ (184,400) | (184,374) | 0 | ||||
Goodwill, Impaired, Accumulated Impairment Loss, End of Period | (186,469) | (186,469) | (2,095) | ||||
Goodwill, Net | $ 10,922 | $ 10,922 | $ 195,170 | $ 195,170 |
Note 6 - Goodwill and Other I49
Note 6 - Goodwill and Other Intangible Assets, Net Schedule of Goodwill - Text (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2017 | Jun. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Goodwill [Line Items] | ||||||
Goodwill, Impairment Loss | $ 0 | $ 0 | $ 184,374 | $ 0 | ||
Finite-Lived Intangible Assets, Remaining Amortization Period | 15 years | |||||
Mortgage and Real Estate Services Segment [Member] | ||||||
Goodwill [Line Items] | ||||||
Goodwill, Impairment Loss | $ 184,400 | $ 184,374 | $ 0 | |||
Impairment of Intangible Assets, Finite-lived | $ 15,800 |
Note 6 - Goodwill and Other I50
Note 6 - Goodwill and Other Intangible Assets, Net Schedule of Finite-Lived Intangible Assets Including Impairment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2017 | Sep. 30, 2017 | Dec. 31, 2016 | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Finite-Lived Intangible Assets, Net | $ 56,045 | ||||
Mortgage and Real Estate Services Segment [Member] | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Impairment of Intangible Assets, Finite-lived | $ 15,800 | ||||
Finite-Lived Intangible Assets, Gross | 113,818 | $ 113,771 | |||
Finite-Lived Intangible Assets, Accumulated Amortization and Impairment | (57,773) | ||||
Finite-Lived Intangible Assets, Accumulated Amortization | (32,713) | ||||
Finite-Lived Intangible Assets, Net | 56,045 | 81,058 | |||
Mortgage and Real Estate Services Segment [Member] | Customer Relationships [Member] | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Impairment of Intangible Assets, Finite-lived | 14,900 | 14,900 | |||
Finite-Lived Intangible Assets, Gross | 83,363 | [1] | 83,316 | ||
Finite-Lived Intangible Assets, Accumulated Amortization and Impairment | [1] | (40,625) | |||
Finite-Lived Intangible Assets, Accumulated Amortization | (19,696) | ||||
Finite-Lived Intangible Assets, Net | 42,738 | [1] | 63,620 | ||
Mortgage and Real Estate Services Segment [Member] | Technology-Based Intangible Assets [Member] | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Impairment of Intangible Assets, Finite-lived | $ 900 | 900 | |||
Finite-Lived Intangible Assets, Gross | 15,250 | [2] | 15,250 | ||
Finite-Lived Intangible Assets, Accumulated Amortization and Impairment | [2] | (8,382) | |||
Finite-Lived Intangible Assets, Accumulated Amortization | (5,497) | ||||
Finite-Lived Intangible Assets, Net | 6,868 | [2] | 9,753 | ||
Mortgage and Real Estate Services Segment [Member] | Trademarks [Member] | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Finite-Lived Intangible Assets, Gross | 8,340 | 8,340 | |||
Finite-Lived Intangible Assets, Accumulated Amortization and Impairment | (2,787) | ||||
Finite-Lived Intangible Assets, Accumulated Amortization | (2,125) | ||||
Finite-Lived Intangible Assets, Net | 5,553 | 6,215 | |||
Mortgage and Real Estate Services Segment [Member] | Order or Production Backlog [Member] | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Finite-Lived Intangible Assets, Gross | 6,680 | 6,680 | |||
Finite-Lived Intangible Assets, Accumulated Amortization and Impairment | (5,813) | ||||
Finite-Lived Intangible Assets, Accumulated Amortization | (5,235) | ||||
Finite-Lived Intangible Assets, Net | 867 | 1,445 | |||
Mortgage and Real Estate Services Segment [Member] | Noncompete Agreements [Member] | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Finite-Lived Intangible Assets, Gross | 185 | 185 | |||
Finite-Lived Intangible Assets, Accumulated Amortization and Impairment | (166) | ||||
Finite-Lived Intangible Assets, Accumulated Amortization | (160) | ||||
Finite-Lived Intangible Assets, Net | $ 19 | $ 25 | |||
[1] | Includes an impairment charge of $14.9 million. | ||||
[2] | Includes an impairment charge of $0.9 million. |
Note 6 - Goodwill and Other I51
Note 6 - Goodwill and Other Intangible Assets, Net Schedule of Future Amortization Expense for Finite Lived Assets (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Finite-Lived Intangible Assets, Amortization Expense, Remainder of Fiscal Year | $ 2,754 |
Finite-Lived Intangible Assets, Amortization Expense, Year Two | 10,316 |
Finite-Lived Intangible Assets, Amortization Expense, Year Three | 8,790 |
Finite-Lived Intangible Assets, Amortization Expense, Year Four | 7,412 |
Finite-Lived Intangible Assets, Amortization Expense, Year Five | 5,834 |
Finite-Lived Intangible Assets, Amortization Expense, Year Five | 5,081 |
Finite-Lived Intangible Assets, Amortization Expense, after Year Five | 15,858 |
Finite-Lived Intangible Assets, Net | $ 56,045 |
Finite-Lived Intangible Assets, Remaining Amortization Period | 15 years |
Note 7 - Reinsurance Reinsuranc
Note 7 - Reinsurance Reinsurance Premiums Written and Earned (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | ||||
Premiums Earned, Net [Abstract] | |||||||
Net premiums earned-insurance | $ 236,702 | $ 238,149 | $ 687,598 | $ 688,184 | |||
Mortgage Insurance Segment | |||||||
Premiums Written, Net [Abstract] | |||||||
Direct Premiums Written | 265,927 | 261,456 | 766,219 | 748,110 | |||
Ceded Premiums Written | [1] | (18,117) | (20,457) | (52,437) | (248,448) | ||
Net premiums written | [2] | 247,810 | 240,999 | [3] | 713,782 | 499,662 | [3] |
Premiums Earned, Net [Abstract] | |||||||
Direct Premiums Earned | 250,541 | 258,074 | 729,832 | 747,342 | |||
Assumed Premiums Earned | 7 | 9 | 21 | 27 | |||
Ceded Premiums Earned | [1] | (13,846) | (19,934) | (42,255) | (59,185) | ||
Net premiums earned-insurance | $ 236,702 | $ 238,149 | [3] | $ 687,598 | $ 688,184 | [3] | |
[1] | Net of profit commission. | ||||||
[2] | Net of ceded premiums written under the QSR Transactions and the Single Premium QSR Transaction. See Note 7 for additional information. | ||||||
[3] | Reflects changes made during the fourth quarter of 2016 to align our segment reporting structure concurrent with changes in personnel reporting lines and management oversight related to contract underwriting performed on behalf of third parties. Revenue and expenses for this business are now reflected in the Services segment. As a result, Services revenue, cost of services and other operating expenses have increased, with offsetting reductions in Mortgage Insurance other income and other operating expenses. |
Note 7 - Reinsurance Reinsura53
Note 7 - Reinsurance Reinsurance Transactions (Details) - Reinsurer Concentration Risk [Member] - Radian Guaranty - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |||
Quota Share Reinsurance Transactions [Member] | ||||||
Ceded Credit Risk [Line Items] | ||||||
Ceded Premiums Written | [1] | $ 4,621 | $ 6,730 | $ 15,137 | $ 22,048 | |
Ceded Premiums Earned | [1] | 6,826 | 10,597 | 22,064 | 33,094 | |
Accrued Liabilities for Commissions, Expense and Taxes | 1,323 | 1,922 | 4,328 | 6,291 | ||
Fees and Commissions | [2] | 2,925 | 3,974 | 10,198 | 12,199 | |
Ceded losses, net | 257 | 495 | 517 | 1,259 | ||
Single Premium QSR Transaction [Member] | ||||||
Ceded Credit Risk [Line Items] | ||||||
Ceded Premiums Written | [1] | 13,248 | 13,004 | 36,064 | 222,085 | [3] |
Ceded Premiums Earned | [1] | 6,771 | 8,608 | 18,941 | 21,748 | |
Accrued Liabilities for Commissions, Expense and Taxes | 5,156 | 5,482 | 14,002 | 61,258 | ||
Fees and Commissions | [2] | 3,536 | 4,382 | 9,721 | 11,173 | |
Risk In Force | 4,300,000 | 3,600,000 | 4,300,000 | 3,600,000 | ||
Ceded losses, net | 406 | 719 | 1,443 | 1,635 | ||
First Lien Mortgage Insurance Products [Member] | Quota Share Reinsurance Transactions [Member] | ||||||
Ceded Credit Risk [Line Items] | ||||||
Risk In Force | $ 1,300,000 | $ 1,700,000 | $ 1,300,000 | $ 1,700,000 | ||
[1] | Net of profit commission. | |||||
[2] | Includes amounts reported in policy acquisition costs and other operating expenses. | |||||
[3] | Includes ceded premiums for policies written in prior periods. See Note 8 of Notes to Consolidated Financial Statements in our 2016 Form 10-K. |
Note 8 - Other Assets (Details)
Note 8 - Other Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | ||
Deposit with the IRS (Note 9) | $ 88,557 | $ 88,557 | $ 88,557 | |||
Corporate-owned life insurance | 85,699 | 85,699 | 83,248 | |||
Securities Loaned, Asset | 60,876 | 60,876 | ||||
Property and equipment | [1],[2] | 88,119 | 88,119 | 70,665 | ||
Accrued investment income | 31,390 | 31,390 | 29,255 | |||
Deferred policy acquisition costs | 15,816 | 15,816 | 14,127 | |||
Reinsurance recoverables | 7,605 | 7,605 | 7,368 | |||
Other | 60,954 | 60,954 | 50,615 | |||
Total other assets | 439,016 | 439,016 | 343,835 | |||
Property and Equipment, Owned, Accumulated Depreciation | 101,700 | 101,700 | 118,500 | |||
Depreciation | 4,600 | $ 2,900 | 12,800 | $ 7,600 | ||
Prepaid reinsurance premium | 239,620 | 239,620 | 229,438 | |||
Technology Upgrade Related Costs [Member] | ||||||
Property and equipment | 45,000 | 45,000 | 49,700 | |||
Leasehold Improvements [Member] | ||||||
Property and equipment | 15,700 | 15,700 | ||||
Securities Financing Transaction, Fair Value [Member] | ||||||
Securities Loaned, Asset | [3] | $ 60,876 | $ 60,876 | |||
Securities Held as Collateral, at Fair Value | $ 0 | |||||
[1] | Includes $45.0 million and $49.7 million at September 30, 2017 and December 31, 2016, respectively, related to our technology upgrade project and $15.7 million at September 30, 2017 of leasehold improvements related to our new corporate headquarters. | |||||
[2] | Property and equipment at cost, less accumulated depreciation of $101.7 million and $118.5 million at September 30, 2017 and December 31, 2016, respectively. Depreciation expense was $4.6 million and $2.9 million for the three-month periods ended September 30, 2017 and 2016, respectively, and $12.8 million and $7.6 million for the nine-month periods ended September 30, 2017 and 2016, respectively. | |||||
[3] | Our securities loaned under securities lending agreements are included at fair value within other assets on our condensed consolidated balance sheets. All of our securities lending agreements are classified as overnight and continuous. None of the amounts are subject to offsetting. |
Note 9 - Income Taxes Income Ta
Note 9 - Income Taxes Income Tax (Details) $ in Millions | Sep. 30, 2017USD ($) |
Operating Loss Carryforwards [Line Items] | |
Operating Loss Carryforwards | $ 297.4 |
Deferred Tax Assets, Tax Credit Carryforwards, Research | 6.4 |
Deferred Tax Assets, Tax Credit Carryforwards, Alternative Minimum Tax | 36.2 |
State and Local NOL Carryforwards [Member] | |
Operating Loss Carryforwards [Line Items] | |
Valuation Allowance, Amount | $ 64.1 |
Note 9 - Income Taxes Summary o
Note 9 - Income Taxes Summary of Income Tax Examinations (Details) - Internal Revenue Service (IRS) [Member] - USD ($) $ in Millions | Sep. 30, 2017 | Sep. 04, 2014 | May 31, 2010 | Jun. 30, 2008 |
Income Tax Examination [Line Items] | ||||
Income Tax Examination, Amount of Claimed Income Tax Refund Being Disallowed for Tax Years 2006 and 2007 | $ 105 | |||
REMIC Residual [Member] | ||||
Income Tax Examination [Line Items] | ||||
Qualified Deposit With The U.S. Department Of Treasury Relating to Tax Years 2000 Through 2004 | $ 85 | |||
Qualified Deposit With The U.S. Department Of Treasury Relating To Tax Years 2005 Through 2007 | $ 4 | |||
Income Tax Examination, Penalties Accrued | $ 157 | |||
Income Tax Examination, Notice of Deficiency, Amounts Related to Unpaid Taxes and Penalties | $ 146 | |||
Income Tax Examination, Proposed State Liabilities Resulting from IRS Examination of Tax Years 2000 Through 2007 | $ 36 |
Note 10 - Losses and LAE Mortga
Note 10 - Losses and LAE Mortgage Insurance Reserves by Product (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2015 | |
Liability for Future Policy Benefit, by Product Segment [Line Items] | |||||
Liability for Claims and Claims Adjustment Expense | $ 556,488 | $ 760,269 | |||
Mortgage Insurance Segment | |||||
Liability for Future Policy Benefit, by Product Segment [Line Items] | |||||
Reinsurance recoverables | [1] | 7,470 | 6,851 | $ 6,484 | $ 8,286 |
Liability for Claims and Claims Adjustment Expense | 556,488 | 760,269 | $ 821,934 | $ 976,399 | |
Prime Mortgage Insurance Product [Member] | Mortgage Insurance Segment | |||||
Liability for Future Policy Benefit, by Product Segment [Line Items] | |||||
Liability for Unpaid Claims | 296,885 | 379,845 | |||
Alt A Mortgage Insurance Product [Member] | Mortgage Insurance Segment | |||||
Liability for Future Policy Benefit, by Product Segment [Line Items] | |||||
Liability for Unpaid Claims | 112,033 | 148,006 | |||
A Minus and Below Mortgage Insurance Product [Member] | Mortgage Insurance Segment | |||||
Liability for Future Policy Benefit, by Product Segment [Line Items] | |||||
Liability for Unpaid Claims | 78,048 | 101,653 | |||
Primary Mortgage Product [Member] | Mortgage Insurance Segment | |||||
Liability for Future Policy Benefit, by Product Segment [Line Items] | |||||
Liability for Incurred but Not Reported Claims | [2] | 13,085 | 71,107 | ||
Liability for Claims Adjustment Expense | 14,687 | 18,630 | |||
Reinsurance recoverables | [3] | 7,445 | 6,816 | ||
Total Primary Insurance Mortgage Insurance Products [Member] | Mortgage Insurance Segment | |||||
Liability for Future Policy Benefit, by Product Segment [Line Items] | |||||
Liability for Claims and Claims Adjustment Expense | 522,183 | 726,057 | |||
Pool Insurance Mortgage Insurance Product [Member] | Mortgage Insurance Segment | |||||
Liability for Future Policy Benefit, by Product Segment [Line Items] | |||||
Liability for Unpaid Claims | 18,630 | 31,853 | |||
Liability for Incurred but Not Reported Claims | 14,576 | 673 | |||
Liability for Claims Adjustment Expense | 550 | 932 | |||
Reinsurance recoverables | [3] | 25 | 35 | ||
Liability for Claims and Claims Adjustment Expense | 33,781 | 33,493 | |||
First Lien Mortgage Insurance Products [Member] | Mortgage Insurance Segment | |||||
Liability for Future Policy Benefit, by Product Segment [Line Items] | |||||
Liability for Claims and Claims Adjustment Expense | 555,964 | 759,550 | |||
Second Lien Mortgage Insurance Product [Member] | Mortgage Insurance Segment | |||||
Liability for Future Policy Benefit, by Product Segment [Line Items] | |||||
Liability for Claims and Claims Adjustment Expense | [4] | $ 524 | $ 719 | ||
[1] | Related to ceded losses recoverable, if any, on captive reinsurance transactions, the QSR Transactions and the Single Premium QSR Transaction. See Note 7 for additional information. | ||||
[2] | At December 31, 2016, primarily related to expected payments under the Freddie Mac Agreement. During the third quarter of 2017, the scheduled final settlement date under the Freddie Mac Agreement occurred and therefore, except for loans with loss mitigation and claims activity already in process, most of the loans subject to the Freddie Mac Agreement were removed from RIF and IIF because the insurance no longer remains in force. See “—Freddie Mac Agreement,” below for additional information. | ||||
[3] | Represents ceded losses on captive reinsurance transactions, the QSR Transactions and the Single Premium QSR Transaction. | ||||
[4] | Does not include our Second-lien premium deficiency reserve that is included in other liabilities. |
Note 10 - Losses and LAE Mort58
Note 10 - Losses and LAE Mortgage Insurance Loss Reserves Rollforward (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |||
Loss reserve [Roll Forward] | |||||
Balance at January 1 | $ 760,269 | ||||
Deduct paid claims and LAE related to [Abstract] | |||||
Balance at September 30 | 556,488 | $ 760,269 | |||
Mortgage Insurance Segment | |||||
Loss reserve [Roll Forward] | |||||
Balance at January 1 | 760,269 | $ 976,399 | 976,399 | ||
Less reinsurance recoverables | [1] | 6,851 | 8,286 | 8,286 | |
Balance at beginning of period, net of reinsurance recoverables | 753,418 | 968,113 | 968,113 | ||
Add losses and LAE incurred in respect of default notices reported and unreported in [Abstract] | |||||
Current year | [2] | 145,798 | 152,320 | ||
Prior years | (45,331) | (3,906) | |||
Total incurred losses and LAE | 100,467 | 148,414 | |||
Deduct paid claims and LAE related to [Abstract] | |||||
Paid Losses and LAE Current year | [2] | 3,639 | 2,725 | ||
Paid losses and LAE Prior years | 301,228 | 298,352 | |||
Total paid losses and LAE | 304,867 | [3] | 301,077 | ||
Balance at end of period, net of reinsurance recoverables | 549,018 | 815,450 | 753,418 | ||
Add reinsurance recoverables | [1] | 7,470 | 6,484 | 6,851 | |
Balance at September 30 | $ 556,488 | $ 821,934 | $ 760,269 | ||
Default To Claim Rate Detail [Abstract] | |||||
Default To Claim Rate Estimate, Gross, For New Defaults | 10.50% | 12.00% | 12.00% | ||
Risk In Force | $ 51,200,000 | ||||
Mortgage Insurance Segment | Pool Insurance Mortgage Insurance Product [Member] | |||||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||||
Concentration Risk, Percentage | 1.60% | ||||
Loss reserve [Roll Forward] | |||||
Balance at January 1 | $ 33,493 | ||||
Less reinsurance recoverables | [4] | 35 | |||
Add losses and LAE incurred in respect of default notices reported and unreported in [Abstract] | |||||
Prior years | 14,200 | ||||
Deduct paid claims and LAE related to [Abstract] | |||||
Add reinsurance recoverables | [4] | 25 | $ 35 | ||
Balance at September 30 | 33,781 | 33,493 | |||
Mortgage Insurance Segment | Primary Mortgage Product [Member] | |||||
Loss reserve [Roll Forward] | |||||
Less reinsurance recoverables | [4] | 6,816 | |||
Deduct paid claims and LAE related to [Abstract] | |||||
Add reinsurance recoverables | [4] | $ 7,445 | $ 6,816 | ||
Default To Claim Rate Detail [Abstract] | |||||
Weighted Average Default To Claim Rate Assumption Net Of Denials Rescissions and Reinstatements | 40.00% | 42.00% | |||
Weighted Average Default To Claim Rate Assumption Excluding Pending Claims Net Of Denials And Rescissions | 38.00% | 40.00% | |||
Default To Claim Rate Estimate, Gross, For Pre-Foreclosure Stage Defaults | 62.00% | ||||
Gross Default To Claim Rate Estimate | 81.00% | ||||
Hurricanes Harvey and Irma [Member] | Mortgage Insurance Segment | |||||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||||
Concentration Risk, Percentage | 8.80% | ||||
Default To Claim Rate Detail [Abstract] | |||||
Risk In Force | $ 4,400,000 | ||||
Participating Policies, Amount in Force | 16,800,000 | ||||
2013 Freddie Mac Agreement [Member] | |||||
Deduct paid claims and LAE related to [Abstract] | |||||
Balance at September 30 | 2,800 | ||||
Radian Guaranty Inc [Member] | 2013 Freddie Mac Agreement [Member] | |||||
Deduct paid claims and LAE related to [Abstract] | |||||
Paid losses and LAE Prior years | $ 54,800 | ||||
[1] | Related to ceded losses recoverable, if any, on captive reinsurance transactions, the QSR Transactions and the Single Premium QSR Transaction. See Note 7 for additional information. | ||||
[2] | Related to underlying defaulted loans with a most recent default notice dated in the year indicated. For example, if a loan had defaulted in a prior year, but then subsequently cured and later re-defaulted in the current year, that default would be considered a current year default. | ||||
[3] | Includes the payment of $54.8 million made in connection with the scheduled final settlement of the Freddie Mac Agreement in the third quarter of 2017. | ||||
[4] | Represents ceded losses on captive reinsurance transactions, the QSR Transactions and the Single Premium QSR Transaction. |
Note 10 - Losses and LAE Rescis
Note 10 - Losses and LAE Rescissions And Denials (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2015 |
Rescissions And Denials [Line Items] | ||||
Reserve for losses and loss adjustment expense (“LAE”) (Note 10) | $ 556,488 | $ 760,269 | ||
Mortgage Insurance Segment | ||||
Rescissions And Denials [Line Items] | ||||
Default To Claim Rate Estimate, Gross, For New Defaults | 10.50% | 12.00% | 12.00% | |
Decrease To Our Loss Reserves Due To Estimated Rescissions And Denials | $ 23,000 | $ 39,000 | ||
Liability for Unpaid Claims and Claims Adjustment Expense, Incurred but Not Reported (IBNR) Claims, Amount | 24,800 | 14,300 | ||
Reserve for losses and loss adjustment expense (“LAE”) (Note 10) | 556,488 | 760,269 | $ 821,934 | $ 976,399 |
2013 Freddie Mac Agreement [Member] | ||||
Rescissions And Denials [Line Items] | ||||
Reserve for losses and loss adjustment expense (“LAE”) (Note 10) | 2,800 | |||
2013 Freddie Mac Agreement [Member] | Radian Guaranty Inc [Member] | ||||
Rescissions And Denials [Line Items] | ||||
Marketable Securities, Restricted | $ 5,500 | $ 63,900 |
Note 11 - Long-Term Debt Schedu
Note 11 - Long-Term Debt Schedule of Long Term Debt (Details) - USD ($) $ / shares in Units, $ in Thousands | Jan. 27, 2017 | Sep. 30, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Nov. 30, 2016 |
Debt Instrument [Line Items] | |||||||||
Long-term debt | $ 1,026,806 | $ 1,026,806 | $ 1,026,806 | $ 1,069,537 | |||||
Loss on induced conversion and debt extinguishment | $ (45,766) | $ (17,397) | (51,469) | $ (75,075) | |||||
Proceeds from termination of capped calls | $ 4,109 | $ 0 | |||||||
Convertible Senior Notes Due 2017 | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt Instrument, Interest Rate, Stated Percentage | 3.00% | 3.00% | 3.00% | ||||||
Long-term debt | $ 521 | $ 521 | $ 521 | 20,947 | |||||
Repayments of Convertible Debt | $ 31,600 | ||||||||
Debt Instrument, Convertible, Carrying Amount of Equity Component | $ 100 | $ 100 | $ 100 | 5,000 | |||||
Convertible Senior Notes Due 2019 | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt Instrument, Repurchase Amount | $ 68,000 | ||||||||
Debt Instrument, Interest Rate, Stated Percentage | 2.25% | 2.25% | 2.25% | ||||||
Long-term debt | $ 0 | $ 0 | $ 0 | 62,013 | |||||
Debt Instrument, Convertible, Conversion Price | $ 10.60 | ||||||||
Repayments of Convertible Debt | 110,100 | ||||||||
Loss on induced conversion and debt extinguishment | $ (4,500) | ||||||||
Debt Instrument, Convertible, Carrying Amount of Equity Component | 13,100 | ||||||||
Senior Notes Due 2019 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt Instrument, Interest Rate, Stated Percentage | 5.50% | 5.50% | 5.50% | ||||||
Long-term debt | $ 157,470 | $ 157,470 | $ 157,470 | 296,907 | |||||
Senior Notes Due 2020 | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt Instrument, Interest Rate, Stated Percentage | 5.25% | 5.25% | 5.25% | ||||||
Long-term debt | $ 231,618 | $ 231,618 | $ 231,618 | 345,308 | |||||
Senior Notes Due 2021 | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt Instrument, Interest Rate, Stated Percentage | 7.00% | 7.00% | 7.00% | ||||||
Long-term debt | $ 194,974 | $ 194,974 | $ 194,974 | 344,362 | |||||
Senior Notes due 2019, 2020, and 2021 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Repayments of Senior Debt | $ 450,000 | ||||||||
Senior Notes Due 2024 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt Instrument, Interest Rate, Stated Percentage | 4.50% | 4.50% | 4.50% | ||||||
Long-term debt | $ 442,223 | $ 442,223 | $ 442,223 | ||||||
Senior Notes [Member] | Senior Notes Due 2019 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt Instrument, Repurchase Amount | 141,400 | 141,400 | 141,400 | ||||||
Debt Instrument, Face Amount | 300,000 | 300,000 | 300,000 | ||||||
Long-term Debt, Gross | 158,600 | 158,600 | 158,600 | ||||||
Senior Notes [Member] | Senior Notes Due 2020 | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt Instrument, Repurchase Amount | 115,900 | 115,900 | 115,900 | ||||||
Long-term Debt, Gross | 234,100 | 234,100 | 234,100 | ||||||
Senior Notes [Member] | Senior Notes Due 2021 | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt Instrument, Repurchase Amount | 152,300 | 152,300 | 152,300 | ||||||
Long-term Debt, Gross | 197,700 | 197,700 | $ 197,700 | ||||||
Senior Notes [Member] | Senior Notes due 2019, 2020, and 2021 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Loss on induced conversion and debt extinguishment | (45,800) | ||||||||
Senior Notes [Member] | Senior Notes Due 2024 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt Instrument, Basis Spread on Variable Rate | 0.50% | ||||||||
Debt Instrument, Face Amount | 450,000 | $ 450,000 | $ 450,000 | ||||||
Proceeds from Issuance of Long-term Debt | $ 443,300 | ||||||||
Debt Instrument, Redemption Price, Percentage | 100.00% | ||||||||
Percent of Stock With Ordinary Voting Rights That Company Must Retain In Order To Make Any Capital Stock Transactions Under Debt Covenant Agreement | 80.00% | 80.00% | 80.00% | ||||||
Convertible Debt | Convertible Senior Notes Due 2017 | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt Instrument, Repurchase Amount | 21,600 | ||||||||
Long-term debt | $ 521 | $ 521 | $ 521 | 20,947 | |||||
Loss on induced conversion and debt extinguishment | $ (1,200) | ||||||||
Long-term Debt, Gross | 526 | 526 | 526 | 22,233 | |||||
Convertible Debt | Convertible Senior Notes Due 2019 | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term debt | 0 | 0 | 0 | 62,013 | |||||
Long-term Debt, Gross | $ 0 | $ 0 | $ 0 | $ 68,024 |
Note 11 - Long-Term Debt Sche61
Note 11 - Long-Term Debt Schedule of Convertible Debt (Details) - USD ($) $ in Thousands | Jan. 27, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Debt Instrument [Line Items] | ||||||||
Net carrying amount | $ 1,026,806 | $ 1,026,806 | $ 1,069,537 | |||||
Convertible Senior Notes Due 2017 | ||||||||
Debt Instrument [Line Items] | ||||||||
Repayments of Convertible Debt | $ 31,600 | |||||||
Debt Instrument, Convertible, Carrying Amount of Equity Component | 100 | 100 | 5,000 | |||||
Net carrying amount | 521 | 521 | 20,947 | |||||
Convertible Senior Notes Due 2019 | ||||||||
Debt Instrument [Line Items] | ||||||||
Repayments of Convertible Debt | $ 110,100 | |||||||
Debt Instrument, Convertible, Carrying Amount of Equity Component | 13,100 | |||||||
Net carrying amount | 0 | 0 | 62,013 | |||||
Convertible Debt | Convertible Senior Notes Due 2017 | ||||||||
Debt Instrument [Line Items] | ||||||||
Principal amount of convertible debt in liabilities | 526 | 526 | 22,233 | |||||
Less: Debt discount, net (1) | [1] | (5) | (5) | (1,221) | ||||
Less: Debt issuance costs (1) | [1] | 0 | 0 | (65) | ||||
Net carrying amount | 521 | 521 | 20,947 | |||||
Contractual interest expense (benefit) | [2] | 4 | $ 166 | 312 | $ 705 | |||
Amortization of debt issuance costs | 0 | 17 | 32 | 71 | ||||
Amortization of debt discount | 10 | 322 | 615 | 1,344 | ||||
Total interest expense (benefit) | [2] | 14 | 505 | 959 | 2,120 | |||
Convertible Debt | Convertible Senior Notes Due 2019 | ||||||||
Debt Instrument [Line Items] | ||||||||
Principal amount of convertible debt in liabilities | 0 | 0 | 68,024 | |||||
Less: Debt discount, net (1) | [1] | 0 | 0 | (5,461) | ||||
Less: Debt issuance costs (1) | [1] | 0 | 0 | (550) | ||||
Net carrying amount | 0 | 0 | $ 62,013 | |||||
Contractual interest expense (benefit) | [3] | 0 | 493 | (510) | 3,043 | |||
Amortization of debt issuance costs | 0 | 74 | 16 | 447 | ||||
Amortization of debt discount | 0 | 737 | 163 | 4,434 | ||||
Total interest expense (benefit) | [3] | $ 0 | $ 1,304 | $ (331) | $ 7,924 | |||
[1] | Included within long-term debt and is being amortized over the life of the convertible notes. | |||||||
[2] | Interest expense (benefit) represents expense incurred, net of adjustments to accruals previously recorded. | |||||||
[3] | Interest expense (benefit) represents expense incurred, net of adjustments to accruals previously recorded. |
Note 12 - Commitments and Con62
Note 12 - Commitments and Contingencies Legal Proceedings (Details) | 9 Months Ended | ||
Sep. 30, 2017matter | Jun. 05, 2017loan | Dec. 22, 2016loan | |
Unasserted Claim [Member] | Minimum [Member] | |||
Loss Contingencies [Line Items] | |||
Minimum Number of Pending or Threatened Matters That Could Affect Our Results | matter | 1 | ||
Total Primary Insurance Mortgage Insurance Products [Member] | Insurance Claims [Member] | |||
Loss Contingencies [Line Items] | |||
Loss Contingency, Legal Actions Commencement, Period | 2 years | ||
Pool Insurance Mortgage Insurance Product [Member] | Insurance Claims [Member] | |||
Loss Contingencies [Line Items] | |||
Loss Contingency, Legal Actions Commencement, Period | 3 years | ||
Ocwen Filings [Member] | Insurance Claims [Member] | |||
Loss Contingencies [Line Items] | |||
Number Of Home Mortgage Loans Involved In Pending Litigation | loan | 8,870 | 9,420 |
Note 12 - Commitments and Con63
Note 12 - Commitments and Contingencies Guarantor Obligations (Details) - Indirect Guarantee of Indebtedness [Member] $ in Millions | Sep. 30, 2017USD ($)transaction |
Guarantees [Abstract] | |
Number of Guaranteed Structured Transactions | transaction | 2 |
Guarantor Obligations, Maximum Exposure, Undiscounted | $ | $ 101.5 |
Note 13 - Capital Stock (Detail
Note 13 - Capital Stock (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | ||
Jun. 30, 2017 | Aug. 09, 2017 | Jun. 29, 2016 | |
Second Quarter 2016 Repurchase Program [Member] | |||
Class of Stock [Line Items] | |||
Stock Repurchase Program, Authorized Amount | $ 125 | ||
Treasury Stock Acquired, Average Cost Per Share | $ 15.59 | ||
Stock Repurchased During Period, Shares | 380 | ||
Third Quarter 2017 Repurchase Program [Member] | |||
Class of Stock [Line Items] | |||
Stock Repurchase Program, Authorized Amount | $ 50 |
Note 14 - Accumulated Other C65
Note 14 - Accumulated Other Comprehensive Income Rollforward of Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | ||
Other Comprehensive Income, Net of Tax [Abstract] | |||||
AOCI, Net of Tax, beginning balance | $ (12,395) | ||||
Unrealized holding gains (losses) arising during the period | $ 6,239 | $ 6,943 | 33,845 | $ 86,614 | |
Less: Reclassification adjustment for net gains (losses) included in net income (loss) | 111 | 3,695 | (2,687) | 2,296 | |
Net foreign currency translation adjustments | 28 | (36) | 136 | (346) | |
Net actuarial gains (losses) | 0 | 156 | 0 | (22) | |
Other comprehensive income, net of tax | 6,156 | 3,368 | 36,668 | 83,950 | |
AOCI, Net of Tax, ending balance | 24,273 | 24,273 | |||
Other Comprehensive Income | |||||
Other Comprehensive Income, before Tax [Abstract] | |||||
AOCI before Tax, Attributable to Parent, beginning balance | 27,878 | 95,548 | (19,063) | (28,425) | |
Unrealized Holding Gain (Loss) on Securities Arising During Period, before Tax | 9,598 | 10,682 | 52,069 | 133,253 | |
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, before Tax | [1] | 170 | 5,685 | (4,134) | 3,533 |
Other Comprehensive Income (Loss), Available-for-sale Securities Adjustment, before Tax | 9,428 | 4,997 | 56,203 | 129,720 | |
Net foreign currency translation adjustments, before tax | 39 | (47) | 205 | (523) | |
Other Comprehensive Income (Loss), Defined Benefit Plan, Gain (Loss) Arising During Period, before Tax | 240 | (34) | |||
Other comprehensive income, before tax | 9,467 | 5,190 | 56,408 | 129,163 | |
AOCI before Tax, Attributable to Parent, ending balance | 37,345 | 100,738 | 37,345 | 100,738 | |
Other Comprehensive Income, Tax [Abstract] | |||||
AOCI, Tax, beginning balance | 9,761 | 33,443 | (6,668) | (9,948) | |
Unrealized Holding Gain (Loss) on Securities Arising During Period, Tax | 3,359 | 3,739 | 18,224 | 46,639 | |
Less: Reclassification adjustment for net (losses) gains included in net income, tax | [1] | 59 | 1,990 | (1,447) | 1,237 |
Other Comprehensive Income (Loss), Available-for-sale Securities, Tax | 3,300 | 1,749 | 19,671 | 45,402 | |
Net foreign currency translation adjustments, tax | 11 | (11) | 69 | (177) | |
Other Comprehensive Income (Loss), Defined Benefit Plan, Gain (Loss) Arising During Period, Tax | 84 | (12) | |||
Other Comprehensive Income, Tax | 3,311 | 1,822 | 19,740 | 45,213 | |
AOCI Tax, ending balance | 13,072 | 35,265 | 13,072 | 35,265 | |
Other Comprehensive Income, Net of Tax [Abstract] | |||||
AOCI, Net of Tax, beginning balance | 18,117 | 62,105 | (12,395) | (18,477) | |
Unrealized holding gains (losses) arising during the period | 6,239 | 6,943 | 33,845 | 86,614 | |
Less: Reclassification adjustment for net gains (losses) included in net income (loss) | [1] | 111 | 3,695 | (2,687) | 2,296 |
Other Comprehensive Income (Loss), Available-for-sale Securities Adjustment, Net of Tax, Portion Attributable to Parent | 6,128 | 3,248 | 36,532 | 84,318 | |
Net foreign currency translation adjustments | 28 | (36) | 136 | (346) | |
Net actuarial gains (losses) | 156 | (22) | |||
Other comprehensive income, net of tax | 6,156 | 3,368 | 36,668 | 83,950 | |
AOCI, Net of Tax, ending balance | $ 24,273 | $ 65,473 | $ 24,273 | $ 65,473 | |
[1] | Included in net gains (losses) on investments and other financial instruments on our consolidated statements of operations. |
Note 15 - Statutory Informati66
Note 15 - Statutory Information Statutory Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Mar. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2016 | |
Reportable Subsegments [Member] | |||
Statutory Accounting Practices [Line Items] | |||
Restricted Net Assets Held by Consolidated Subsidiaries | $ 3,400 | ||
Radian Guaranty | |||
Statutory Accounting Practices [Line Items] | |||
Statutory Accounting Practices, Statutory Capital and Surplus, Balance | 1,125.9 | $ 1,349.7 | |
Statutory Accounting Practices, Dividends Paid with Approval of Regulatory Agency | $ 175 | ||
Statutory Accounting Practices, Statutory Capital and Surplus, Increase (Decrease) | (175) | 81.3 | |
Radian Reinsurance [Member] | |||
Statutory Accounting Practices [Line Items] | |||
Capital Contributions | 175 | ||
Statutory Accounting Practices, Statutory Capital and Surplus, Balance | 332.1 | $ 147.6 | |
Statutory Accounting Practices, Statutory Capital and Surplus, Increase (Decrease) | $ 175 | ||
Deferred Tax Assets [Member] | |||
Statutory Accounting Practices [Line Items] | |||
Statutory Accounting Practices, Statutory to GAAP, Amount of Reconciling Item | $ (63.2) |
Note 15 - Statutory Informati67
Note 15 - Statutory Information Risk To Capital Calculation (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2017USD ($) | Sep. 30, 2017USD ($)state | Dec. 31, 2016USD ($) | ||
Risk to Capital Line Items [Line Items] | ||||
Number Of States That Have A Statutory Or Regulatory Risk Based Capital Requirement | state | 16 | |||
Risk To Capital Ratio, Regulatory Maximum | 25 | |||
Radian Reinsurance [Member] | ||||
Risk to Capital Line Items [Line Items] | ||||
Statutory Accounting Practices, Statutory Capital and Surplus, Increase (Decrease) | $ 175 | |||
Statutory policyholders’ surplus | $ 332.1 | $ 147.6 | ||
Radian Guaranty | ||||
Risk to Capital Line Items [Line Items] | ||||
Statutory Accounting Practices, Statutory Capital and Surplus, Increase (Decrease) | (175) | 81.3 | ||
Statutory Accounting Practices, Dividends Paid with Approval of Regulatory Agency | $ 175 | |||
RIF, net (1) | [1] | 38,712.8 | 35,357.8 | |
Common stock and paid-in capital | 1,866.2 | 2,041 | ||
Unassigned earnings (deficit) | (740.3) | (691.3) | ||
Statutory policyholders’ surplus | 1,125.9 | 1,349.7 | ||
Contingency reserve | 1,565.7 | 1,260.6 | ||
Statutory capital | $ 2,691.6 | $ 2,610.3 | ||
Risk-to-capital | 14.4 | 13.5 | ||
Statutory Accounting Practices, Statutory Net Income Amount | $ 337.5 | |||
Non RBC States [Member] | Minimum [Member] | ||||
Risk to Capital Line Items [Line Items] | ||||
Capital Required for Capital Adequacy | 1 | |||
Non RBC States [Member] | Maximum [Member] | ||||
Risk to Capital Line Items [Line Items] | ||||
Capital Required for Capital Adequacy | $ 5 | |||
Reportable Subsegments [Member] | ||||
Risk to Capital Line Items [Line Items] | ||||
Risk-to-capital | 13.4 | 13.6 | ||
[1] | Excludes risk ceded through reinsurance contracts (to third parties and affiliates) and RIF on defaulted loans. |
Note 16 - Subsequent Events Rev
Note 16 - Subsequent Events Revolving Credit Facility (Details) - Subsequent Event [Member] $ in Millions | Oct. 16, 2017USD ($) |
Subsequent Event [Line Items] | |
Line of Credit Facility, Current Borrowing Capacity | $ 225 |
Line of Credit Facility, Maximum Borrowing Capacity | $ 300 |
Note 16 - Subsequent Events 201
Note 16 - Subsequent Events 2018 Single Premium QSR Transaction (Details) - 2018 Single Premium QSR [Member] - Scenario, Forecast [Member] $ in Millions | 1 Months Ended |
Oct. 31, 2017USD ($)reinsurer | |
Subsequent Event [Line Items] | |
Third-Party Reinsurers | reinsurer | 8 |
Percentage of NIW Able to be Ceded Under QSA | 65.00% |
Ceded Premiums Written | $ | $ 335 |
Ceded Insurance Commission Percentage | 25.00% |
Maximum [Member] | |
Subsequent Event [Line Items] | |
Loss Ratio | 56.00% |